afr article

From today's AFR:

Lone Star to call for Antares board overhaul

Lone Star Value Investors, a US activist fund, is set to demand a board overhaul at Antares Energy, the West Australian-based oil and gas junior, on Thursday morning.

Street Talk understands the disgruntled investor, which owns 4.9 per cent, will nominate five new independent directors, citing concerns at the company’s corporate governance record, including a lack of transparency and fears about the board’s independence.

Lone Star will also dispute the value of Antares’s assets. Currently, the Texas-focused explorer has its acreage valued at 46¢ to 57¢, but the US fund believes the level should be far higher at 81¢ to $1.49.

If Lone Star’s calculations are accurate, that would equate to a total asset value of $US225 million ($243 million) to $US415 million.

The crusade against Antares reflects the growing trend of shareholder activism in Australia, which has so far remained comparatively insulated from the epic battles that regularly convulse the US corporate landscape.

But this is also not the first time Lone Star has sought to increase the value of an oil and gas company centred on Texas’s Permian Basin. The US fund waged a similar fight against Antares’s competitor, Callon Petroleum, which agreed to accept more directors on to its board, although it managed to fend off demands to sell the company.

Since that skirmish, Callon’s share price has jumped by more than 50 per cent.

Lone Star has $US110 million of funds under management and Antares ranks as one of its top five holdings.