Australia’s AWE rejects $310m takeover bid

The upstream oil and gas explorer described the proposal from US-based Lone Star Funds as "unsolicited" and "opportunistic".

Australian independent energy company AWE has rejected an A$421.4 million ($310 million; €272 million) takeover bid from the Japanese branch of Lone Star Funds, a US-based private equity firm. 

Lone Star had proposed to buy all of AWE for A$0.8 a share in cash, representing a 30 percent premium to the company’s Tuesday closing price at A$0.615. 

AWE shares gained 16 percent to close at A$0.715 in Sydney yesterday. 

The AWE board concluded that “the bid is opportunistic and does not reflect the fair underlying asset value of the company”, according to a statement. 

The oil and gas explorer also said that the proposal was unsolicited, indicative, conditional and non-binding. 

Based in Sydney, AWE has a substantial portfolio of production, development and exploration assets in Australia, New Zealand and Indonesia. 

In the past few months, AWE has divested a 42.5 percent stake in the Bulu PSC to HyOil for up to A$27.5 million, as well as its 10 percent interest in the Sugarloaf project to US-based Carrier Energy Partners II for $190 million.   

At the same time, it is developing the first stage of the Waitsia gas field in Western Australia, with production expected to kick-start in August this year. 

Established in 1995, Lone Star invests globally in real estate, equity, credit and other financial assets. It has raised 16 private equity funds totalling over $65 billion since inception, according to its website.