The takeover battle for energy junior Ambassador Oil and Gas is heating up, with Magnum Hunter lifting its offer.
US-based Magnum responded to Australian company Drillsearch's improved offer on Monday with a sweetened cash offer of its own.
It has also applied to the Takeovers Panel to protest against Ambassador's chairman David Shaw and managing director Guistino Guglielmo selling their shares to Drillsearch on Monday, handing it a 50 per cent-plus controlling stake.
Magnum has increased its bid from 34 cents to the equivalent of 38 cents per Ambassador share, or one of its shares for 23.6 Ambassador shares.
It has also given shareholders the option of receiving cash rather than shares in Magnum.
That is a challenge to Drillsearch chairman Jim McKerlie's comments on Monday that shareholders should not accept US-listed Magnum's offer and subject themselves to a foreign regulatory regime.
Drillsearch topped up its 33.8 cents share swap offer with five cents per share cash.
Ambassador shares shot up four cents, or 12.12 per cent to 37 cents, while Drillsearch added 2.5 cents to $1.535.
Magnum says the Ambassador directors' acceptance of the Drillsearch offer has denied other investors the chance to consider the improved Magnum offer and has handed control of the company to Drillsearch.
"Magnum Hunter is concerned that such acceptances have not taken place in an efficient, competitive and informed market and are inconsistent with the actions that would normally be associated with achieving the best possible outcome for Ambassador shareholders," Magnum said in a statement.
Ambassador said it was considering the offer and that Drillsearch had five business days to match it.
Ambassador has exploration assets in South Australia's Cooper and Eramonga onshore oil and gas basins, where the larger Drillsearch is also located.
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