Sino Gas & Energy receives $530m offer from US equity firm

The Linxing site. Image: Sino Gas & Energy.

US-based private equity firm Lone Star plans to acquire Sino Gas & Energy Holdings for $530 million, an offer backed by the ASX-listed target.

Under the scheme implementation agreement, shareholders of China-focused Sino will receive a cash consideration of $0.25/share from Lone Star, which is a 19 per cent premium on the target’s May 30 closing price of $0.21.

Sino’s directors have unanimously recommended shareholders accept the deal in the absence of a superior offer, with managing director Glenn Corrie describing the bid as “attractive.”

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

“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.”

Sino is focused on developing unconventional gas assets in China. Earlier this month, it secured approval from its Chinese Government-backed partner to develop the first stage of the Linxing natural gas project in Shanxi Province.

Formed in 1995, Lone Star is a private equity firm that invests globally in a range of different asset classes, including in the oil and gas industry. Lone Star has a history of targeting ASX-listed oil and gas companies, having made an unsuccessful bid for AWE in 2016.

The acquisition is expected to be implemented in September.