TROUBLED Antrim Energy has rejected a £6.35 million hostile takeover bid from Sound Oil, citing a lack of value for shareholders.

Sound Oil said Antrim’s “unsustainable ongoing costs” and “reduced appeal and credibility” as a standalone company had motivated the takeover offer.

It said the bid was prompted by Antrim’s falling market capitalisation caused by the divestment of the company’s producing UK subsidiary and the restructure of its Calgary executive team.

Sound Oil also cited the physical distance between the Calgary-based management and their European operations, and a reduced technical capacity, as reasons behind the move.

Antrim made a $US5.7 million loss for the first nine months of the year and its £6 million market capitalisation has fallen below its cash balance in recent months.

The offer valued each Antrim share at 0.3198 of a Sound Oil share, meaning their valuation was cut from the 10.75p they were valued at on 21 November to only 3.44p.

The company said it submitted a proposal to the Antrim board to recommend an all-share offer to combine the two companies but Antrim was only prepared to engage in discussions if Sound Oil agreed to restrict its ability to proceed with a public offer.

Antrim announced on 16 December that the offer did not meet critical criteria for shareholders or recognise the value of the company’s assets and prospects.

Chairman Stephen Greer said the company would retain its focus on using its strong balance sheet and licence holdings to pursue “opportunities either asset-specific or corporate”, reflecting the consensus view of shareholders at the early-December annual general meeting.

Sound Oil chief executive James Parsons said the deal would have allowed Antrim’s business to be managed as part of a wider European portfolio, by a Europe-based team.

“The combination provides a pan-European platform to enable further consolidation in the sector whilst delivering a more diverse portfolio, added scale and increased investor appeal,” Mr Parsons said.

“We are excited by the potential of the combined group and believe that the intended offer is enhancing to both sets of shareholders.”

With news of the takeover attempt, Antrim’s price on the Toronto Stock Exchange rose 25 per cent to C$0.075 on 24 November.

Following the announcement that the bid had been rejected, its share price was sitting at a near all-time low of C$0.045.

Sound Oil said the deal would have allowed it to leverage its own technical, financial and commercial expertise to create a “high impact” exploration company.

It had hoped the deal would allow it to add Antrim’s Skellig Block, offshore Ireland, to its exploration portfolio.

Sound Oil said the deal would run in line with its desire to build a “pan-European oil and gas business of scale, leveraging off its strong Italian portfolio”.

The deal would have sounded the closure of Antrim’s Calgary office and associated redundancies.