Sino Gas & Energy has agreed to a $530 million takeover offer from U.S. private equity firm Lone Star.
The China-focused gas developer said its shareholders will receive 25 cents per share, a 19 percent premium to its last closing price of 21 cents on the Australian Securities Exchange.
The cash offer provides shareholders with "cash certain value now versus the future risks and uncertainties associated with the business," SinoGas managing director Glenn Corrie said in a statement.
Directors intend to unanimously recommend the scheme in the absence of a better proposal, the company said.
Shareholders will vote on the scheme at a shareholder meeting expected to be held in late August or early September.
Sino Gas shares have gained more than 35 percent in the year to Wednesday's close, outperforming the ASX energy index , which has remained flat. Thursday's deal was announced before the market opened.
Investors regard Sino Gas as a play on strong growth in Chinese natural gas demand, as the world's second largest economy attempts to move away from coal. China is the world's third-biggest natural gas consumer.
The firm said last Tuesday that its joint venture with a subsidiary of Chinese oil giant CNOOC received approval for a production sharing contract in China.
Representatives at Lone Star were not immediately available for comment. Lone Star made an unsuccessful bid two years ago for Australian gas producer AWE.