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UPDATE 1-Australia's AWE rejects $311 mln bid from Lone Star fund

Published 11/05/2016, 01:07 pm
Updated 11/05/2016, 01:10 pm
© Reuters.  UPDATE 1-Australia's AWE rejects $311 mln bid from Lone Star fund
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(Updates shares, adds recent deals)

MELBOURNE, May 11 (Reuters) - Australian oil and gas company AWE Ltd AWE.AX said on Wednesday it had rejected a A$421 million ($311 million) takeover approach from U.S.-based private equity fund Lone Star, calling the offer too cheap.

The bid adds to a spate of energy deals in Australia over the past year with acquirers seeking to swoop on beaten down assets, ranging from Beach Energy's BPT.AX takeover of Drillsearch Energy to Woodside Petroleum's WPL.AX scrapped $8 billion bid for Oil Search OSH.AX .

Lone Star's Japan Acquisitions unit offered A$0.80 a share, a 30 percent premium to AWE's close on Tuesday.

"The board concluded that it is opportunistic and does not reflect the fair underlying asset value of the company," AWE said in a statement to the Australian stock exchange.

AWE's shares have slumped 58 percent over the past year, hammered like its peers by sliding oil and gas prices.

The company, which recently appointed a new chief executive, David Biggs, has stakes in oil and gas projects in Australia, China, Indonesia, New Zealand, and the United States. As of March 31, it had net cash of A$52 million and no debt.

Lone Star executives in the United States were not available to comment outside office hours.

AWE's shares jumped 20 percent to A$0.74 in first trading after the announcement, but that was well below the offer price, reflecting uncertainty over whether a higher offer would emerge. ($1 = 1.3545 Australian dollars)

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