Eureka knocks back US takeover bid

Takeover target Eureka Energy has rejected a merger proposal lodged by Houston-based Lonestar Resources, after the parties were not able to agree to terms over the weekend.

Lonestar launched the all-scrip, non-binding offer for Eureka on Friday.

Terms and conditions were not disclosed.

Eureka said its initial view was that it would be unlikely to recommend the proposal, and subsequent discussions with Lonestar over the weekend to sweeten the offer were unfruitful.

Lonestar has consequently withdrawn its offer, Eureka said.

Eureka remains the target of fellow Western Australian shale gas explorer Aurora Oil & Gas, whose 45 cents per share offer closes on June 15.

By close of trade today, Eureka stocks had shed 6.25 per cent to finish at 45 cents.