AWE rejects $311m takeover bid from US private equity firm Lone Star

Australian energy company AWE has rejected a A$421m ($311m) takeover bid from US-based private equity company Lone Star Funds, saying that the proposal does not reflect the fair underlying asset value of the company.

The company’s decision came after it received an unsolicited indicative, conditional and non-binding proposal from Lone Star’s Japan Acquisitions unit to acquire all of the shares in AWE for A$0.80 per share.

AWE said in a statement: "The proposal was subject to a number of conditions, including due diligence, legal documentation and internal approval conditions.

"The AWE Board has met to consider the proposal and has decided to reject it."

AWE is currently focusing on the development of the A$18m Waitsia natural gas project in Western Australia.

The company started construction of Stage 1A of the gas project, which will supply gas to the Western Australia domestic gas market beginning the third quarter of 2016.

AWE recently signed an agreement to sell its 42.5% interest in the Bulu production sharing contract (PSC) in offshore east Java, Indonesia, to HyOil for $20m.

AWE focuses on upstream oil and gas opportunities and has project offices in Perth and New Zealand.

The company has a portfolio of production, development and exploration assets in Australia, New Zealand, and Indonesia.