US private equity (PE) firm Lone Star Fund X Acquisitions has signed an A$530m ($401.21m) agreement to acquire all issued share capital of Sino Gas.
Under the terms of the agreement, Lone Star will offer A$0.25 ($0.18) a share to Sino Gas shareholders.
Sino Gas’ board of directors has asked the shareholders to vote in favour of the deal in the absence of a better offer.
In addition to shareholder consent, the transaction is conditional on receipt of approvals from the court and the Australian Foreign Investment Review Board (FIRB).
Sino Gas managing director Glenn Corrie said: “The 100% cash consideration represents an attractive premium to recent trading prices, and provides certainty of value for Sino shareholders.
“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.”
The company holds a 49% interest in Sino Gas & Energy (SGE), which operates the Linxing and Sanjiaobei production sharing contracts (PSCs) in China’s Ordos Basin.
The transaction would be implemented through a scheme of arrangement.
Affiliates of Loan Star Fund X (US), and Loan Star Fund X (Bermuda), which closed in November 2016 with a $5.5bn capital commitment, are funding the acquisition.
Lone Star is focused on making investments in a range of assets classes, including the oil and gas industry, supported capital commitments worth more than $70bn.
