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Private equity firm makes A$530m cash bid for Sino Gas

31st May 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX-listed Sino Gas & Energy has received a A$530-million cash offer from private equity firm Lone Star, which the Sino board has unanimously recommended.

Lone Star is offering Sino shareholders 25c a share in cash for their holdings in the ASX-listed company, which was a 19% premium to the company’s closing price on May 30, and a 32% premium to the one-month volume-weighted average price of Sino shares.

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

“While the Sino 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.”

Sino holds a portfolio of unconventional gas assets in China holding a 1P reserve of 362-billion cubic feet and a 2P reserve of some 552-billion cubic feet, at the end of 2015. The company is currently running two pilot plant operations in China, which started in 2014 and 2015 respectively.

The takeover offer is subject to a number of conditions, including Foreign Investment Review Board approval, shareholder and court approvals, as well as an independent expert concluding that the offer was in the best interest of Sino shareholders.

A shareholders meeting is expected in late August or early September, with the deal likely to be implemented by September.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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