US Lone Star Makes $402mn Takeover Bid for Sino Gas

Private equity firm Lone Star has made a A$530mn ($402mn) takeover bid for Australia-listed Sino Gas which has been backed by the board of the latter, Sino said May 31.

“The 100% cash consideration represents an attractive premium to recent trading prices, and provides certainty of value for Sino shareholders,” Sino Gas’ managing director Glenn Corrie said.

The acquisition would see Sino shareholders receive $0.25 per share, which compares to Sino’s closing price of A$0.21 per share on May 30.

“While the Sino Gas Directors remain of the view that the business and assets have significant potential, they acknowledge that the cash consideration provides shareholders with cash certain value now versus the future risks and uncertainties associated with the business,” Corrie said.

Sino is the operator of the Chinese Linxing and Sanjiaobei production sharing contracts in the Ordos Basin, China’s largest gas producing basin. The company’s current interest in the Linxing PSC with CUCBM is 70% and 49% of the Sanjiaobei PSC held with PetrolChina subsidiary PCCBM.

Lone Star invests globally in a range of different assets classes, including the oil and gas industry.

The remains subject to a number of conditions including approval from the Foreign Investment Review Board.