US activist fund Lone Star Value Investors has bought up 5.3 per cent of Perth-based oil and gas junior Antares Energy and will force a vote in a bid to reform the board.
Lone Star said it wanted to add five "highly qualified independent directors" to the existing board, who would be able to turn around Antares' performance. They have expertise in petroleum engineering, finance, capital markets and M&A, the Connecticut-based fund said.
"We believe this expertise is needed on the Antares board to improve corporate governance and create a strategic plan to enhance value for the benefit of ALL shareholders," Lone Star said in a statement released Thursday.
Antares, which is focused on shale in the US, last year struck a deal to sell its key assets for $US300 million, several times its market value. It did not reveal the proposed buyer. However the sale didn't eventuate, with the board saying in February it had concluded the best returns could be achieved for shareholders by developing the assets in the Permian Basin in Texas, rather than divesting them.
Antares, led by chairman and chief executive James Cruickshank, has three core projects – the Southern Star, Northern Star and Big Star ventures – all in the rich Wolfberry Trend region of the Permian Basin in western Texas.
Its shares closed on Wednesday at 48¢, giving it a market value of $122.4 million.
Antares has a reputation for buying and selling assets at a healthy profit, having previously sold shale ventures in the Eagle Ford region for $US200 million to Petrohawk Energy, which was subsequently bought by BHP Billiton for about $US15 billion.
But Lone Star urged the existing board not to take action "adverse to the best interests" of shareholders in advance of the extraordinary general meeting, such as issuing equity, convertible debt, making acquisitions or divestments, or adding board members.
"In the coming days, we intend to provide shareholders with greater detail on the qualifications, experience and track records of our nominees and Lone Star Value's plan to maximize shareholder value," it said.