NEW YORK, July 8, 2014 /PRNewswire/ -- Lone Star Value
Investors, LP is open to any and all ways to maximize value for
Antares' shareholders including a sale of all of Antares Energy
Limited's (ASX: AZZ) (AZZEF) Permian Basin assets. However,
any asset sale must be done through a full and fair auction process
to the highest bidder and ALL the cash must be returned to Antares'
shareholders. Lone Star Value strongly believes its proposed
nominees are better able to maximize value for Antares shareholders
and oversee an effective sale process than are Antares' employee
directors. Lone Star Value estimates Antares' assets could be
worth well in excess of US$300
million if a robust sales process is overseen by an improved
Board with Lone Star Value's candidates.
Lone Star Value has serious concerns with Antares' latest
announcement that it has received a non binding proposal from a
bidder for all its Permian Basin assets for US$300 million and questions whether or not the
proceeds from an asset sale by the current Board would result in
cash ever being returned to Antares' shareholders.
Lone Star Value's own valuation of Antares' Permian Basin assets
– which centres on the proven Southern Star properties – ranges
from US$250 million to US$450 million
with a mid-point of $350 million.
Lone Star Value believes Antares' announcement should be
treated with scepticism given the same proposal for the exact same
amount failed to materialise earlier this year. In addition,
the issuance of dilutive convertible debt at a high coupon rate
(10%) just last week appears to be at odds with a company about to
sell all its assets for cash.
Commenting on the proposed sale, Jeff
Eberwein of Lone Star Value noted that Antares CEO and
Chairman, James Cruickshank, has
lost credibility with the vast majority of Antares' shareholders
and should not be trusted to lead the sales process without the
oversight of a new, independent Board.
"This latest news from Antares seems to be another example in a
long pattern of random and incongruous decision-making by an
unchecked CEO. We find it extraordinary that Mr Cruickshank
has trotted out the same failed deal in what appears to be an
attempt to defeat our efforts to enhance Antares' Board by removing
employee directors and adding new, independent, highly-qualified
directors."
"Mr. Cruickshank unilaterally cancelled the previous proposed
transaction after Antares' shareholders overwhelmingly approved the
deal at an extraordinary general meeting in January. The
shareholders were never informed of the identity of the
buyer. All Mr. Cruickshank told shareholders is that the
asset sale for US$300 million
delivered less shareholder value than if the company were to
develop these assets itself. We question what has changed at
this juncture to cause Antares to re-engage in a sale process when
its own stated plans consider an overly-ambitious and ill-conceived
$979 million multi-year capital
expenditure programme hatched after the previous failed sale
process."
"We are again being told that an asset sale is under
consideration less than two weeks after the company announced a
highly dilutive and expensive convertible note issue to raise
$19.5 million. Why raise so
much new capital if Antares is about to sell all its assets for
cash? This strategically incoherent approach of a CEO who
changes his strategy every few months is, in our view, why Antares'
stock trades at a significant discount to its asset value.
Given how shareholders were treated earlier this year, we have no
faith that this new proposed sale will be seen through to its
conclusion or properly overseen absent an overhaul of this Board,
nor do we have any faith in cash being returned to shareholders in
the event that a sale actually materialises."
"If there is a qualified buyer for Antares' assets, then a
stronger, independent Board is more urgently needed than ever to
run an auction process to sell all or part of the company's assets
to the highest bidder. Lone Star Value's director candidates
have the experience to run a robust auction and are much better
positioned to maximise value for all shareholders than the
incumbent Board. They also intend to use the $19.5 million proceeds from the recent
convertible issuance for a share buyback and plan to implement a
full review of the company's operations."
"We have attempted to discuss with Mr. Cruickshank our concerns
about how the company is being run and have publicly requested that
no major transactions be undertaken until Antares shareholders have
had a chance to vote on the Board they want to represent them on 22
July. Unfortunately, Mr. Cruickshank has chosen to ignore us.
He has also refused to inform us who received the latest
tranche of convertible notes and how the company plans to spend the
funds raised." Mr Eberwein said.
Lone Star Value urges all Antares shareholders to read carefully
the materials that Lone Star Value has mailed and may continue to
mail to them as those materials contain important
information. Lone Star Value called on all Antares
shareholders to vote on its blue and white proxy card to improve
the Board of Antares.
For further information please visit our website,
www.antaresvalue.com.au, or call our shareholder information line,
1300 889 468 (from within Australia) or +61 2 8022 7902 (from outside
Australia).
Media enquiries please contact:
John Hurst – Cannings Corporate
Communications
+61 418 708 663
Lone Star Value Management
+1-203-489-9500
SOURCE Lone Star Value Investors, LP