AWE shares dive after Chinese withdraw bid

AWE shares have tumbled following a decision by the Chinese state-owned company interested in buying the Australian oil and gas group to withdraw its $430 million proposal, after it was unable to conduct a final due diligence review on the target.

AWE did not say why China Energy Reserve and Chemical Group had formally withdrawn the unsolicited indicative proposal, which had valued the ASX-listed securities at 71 cents per share.

However, CERCG had made it clear that it woiuld only proceed with a formal bid if it was able to conduct a final due diligence review on AWE's assets. 

AWE's most attractive asset is a 50 per cent stake in the Waitsia project, located in the Perth Basin, which has been touted as the largest onshore conventional gas discovery in Western Australia for decades.

CERCG was advised by local investment bank Argonaut, while AWE was advised by UBS.

News of the proposal had sent AWE shares soaring from 54.5 cents last week to as high as 70.5 cents.

Today they fell as low as 58.5 cents before settling around 62 cents.