Sydney Morning Herald: Armour Energy Valuation to Set Scene for US-China Battle for Control

Little-known shale gas explorer Armour Energy has become a battleground for US shale pioneer Aubrey McClendon and Chinese conglomerate Landbridge Group, with the publication this week of a target statement potentially set to reinforce Armour's argument that a $36.6 million takeover bid from the Chinese group is too low.

But the Australian shale junior's stock remains trading around the 12¢ a share being offered by Landbridge, signalling a lack of confidence that a higher offer is in the wings. It also reflects continuing uncertainty around the alternative future being proposed by Armour in the form of a $US130 million exploration deal with Mr McClendon's American Energy Partners.

Armour chief executive Robbert de Weijer describes the choice between the exploration deal with AEP and the Landbridge offer as "a no-brainer", pointing to the difference in value between the two.

Landbridge's offer values Armour at $36.6 million, while the AEP deal values it at about $48 million, including $18 million payments from the US player and the company's $8.5 million of cash in hand, according to Mr de Weijer. AEP has agreed to buy $6.74 million of new shares in Armour, at 20c per share. MORE