PERTH (miningweekly.com) – The betting war for ASX-listed Ambassador Oil & Gas has heated up further with New York-listed Magnum Hunter Resources Corporation increasing its offer for the Australian junior, after rival Drillsearch hiked its own offer on Monday.

Drillsearch had previously offered one share for every 5.4 Ambassador shares held, but on Monday tagged on 5c in cash for the 5.4 Ambassador shares.

In retaliation, Magnum on Tuesday increased its offer for Ambassador from one of its own shares for every 27.8 Ambassador shares held, to one of its own shares for every 23.6 Ambassador shares held.

The new offer represented a value of A$0.38 a share for each Ambassador share, and more than matched the A$0.338 implied value of the Drillsearch offer.

Additionally, Magnum was also giving Ambassador shareholders the option to exchange their shares for cash, rather than Magnum stock. Under the sale facility, the Magnum stock that would otherwise be issued to Ambassador shareholders would be issued to a nominee, who will arrange for the sale of the stock and remit the cash proceeds to Ambassador shareholders.

The new Magnum offer represented a 95% premium to the closing price of Ambassador shares on May 23, when the company went into a trading halt on the first announcement of a Drillsearch offer.

The new Magnum offer also represented a 97% premium to Ambassador’s three-month historical volume-weighted average price, and a 102% premium to the six-month volume-weighted average price.

Meanwhile, Magnum said that it would turn to the Australian Takeovers Panel after Ambassador’s nonexecutive chairperson David Shaw, and the company’s MD Guistino Guglielmo, who collectively hold 26.43% of the company, decided to accept the Drillsearch offer.

Magnum said that by accepting the offer, the two company executives could have denied Ambassador shareholders the opportunity to participate in the improved Magnum offer, and delivered control of the company to Drillsearch, at the determent of shareholders.

Ambassador on Tuesday told shareholders that they were not required to take any action until the company had assessed the merits of the new Magnum offer.