Australia's Mineral Resources Ltd. has made an all-share bid for domestic gas producer AWE Ltd., just topping a A$442 million (US$333 million) sweetened offer from state-owned China Energy Reserve and Chemicals Group (CERCG).

The suitors are targeting AWE's stake in its Waitsia gas project in Western Australia, which the company has called the country's biggest conventional gas find onshore in four decades.

Mineral Resources, a provider of mining infrastructure, made an offer to AWE on Dec. 8 that at the time was worth A$0.80 a share, seeking to secure energy supplies for its own operations.

But an 8% fall in Mineral Resources' shares on Dec. 11 has reduced the value of its bid to just a touch above CERCG's all-cash offer of A$0.73 a share.

"The share price drop indicates investors think the Chinese will probably come back with another bid," said Stephen Butel, an analyst at Platypus Asset Management, which does not own shares in AWE.

AWE, which has rejected two other bids in the past four years, told shareholders to take no action while it weighed the offers.

The company's shares jumped 16% to A$0.85, as investors bet a higher bid was coming, either from CERCG or another suitor. At that level, the shares are 56% higher than they were on Nov. 29, the day before CERCG made its first proposal.

Both bids are well below a valuation of A$0.91 from analysts at Royal Bank of Canada, which ran a recent share sale for AWE.

CERCG launched its offer last Dec. 8, going direct to shareholders after AWE rebuffed a friendly approach at A$0.71.

The Chinese firm played up the advantages of its bid, which only needs backing from a simple majority to succeed, while Mineral Resources' proposal for a scheme of arrangement would need 75% support from AWE shareholders.

"Our all-cash offer means certainty of value for AWE shareholders. Our cash offer can be executed and delivered to AWE shareholders more quickly than a scheme," CERCG Australia business manager Kevin Gao said in an emailed statement on Dec. 11.

CERCG said it is mainly looking to supply gas to remote communities and mine sites in Australia using its technology to liquefy gas, transport it in containers and regasify it in areas not connected to pipelines.

However, it is also considering shipping LNG in containers to Australia's east coast, where gas prices have soared due to the start-up of three gas export plants and rising demand for gas-fired power.

AWE rejected a A$750 million share-based offer from Senex Energy Ltd. in 2013 before oil prices collapsed and a A$421 million approach from U.S. private equity firm Lone Star Funds last year. (US$1 = 1.3319 Australian dollars)