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Australia’s Sino Gas & Energy Holdings Ltd (SEH.AX) agreed on Wednesday to a A$530 million ($401 million) takeover offer from U.S. private equity firm Lone Star, saying the risks the company faces in China justified putting the bid to a vote.

Lone Star is betting on two large gas projects in China, where gas demand is soaring, and where, after many years of work, Sino Gas & Energy only recently won the first of several approvals needed to develop its projects.

Sino Gas said its shareholders will receive A$0.25 per share, a 19 percent premium to its close on Tuesday on the Australian Stock Exchange (ASX).

Lone Star declined to comment on the offer.

The cash offer provides shareholders with “cash certain value now versus the future risks and uncertainties associated with the business,” Sino Gas Managing Director Glenn Corrie told analysts and investors on a teleconference.

Brokers with price targets on Sino Gas at least 20 percent above the offer price were surprised the board had unanimously recommended Lone Star’s offer.

“We have previously highlighted the potential upside as Sino Gas de-risks and moves to being cash flow positive by 2020, thus we can only conclude there are greater risks the board is aware of than we have modeled,” Macquarie analysts said in a note.

Small investors who have backed the company for years and just saw it secure some long-awaited agreements, like a recent production sharing contract with Chinese oil giant CNOOC Ltd (0883.HK), were unimpressed with the offer.

“Private equity doesn’t invest unless they expect to get outsized returns. Why should we be giving that away?” Craig Lindner, a private investor, told Corrie on the teleconference, adding he would be voting against the offer.

Sino Gas shares rose as much as 21 percent before easing to trade up 14 percent at A$0.24, suggesting investors don’t expect a higher bid to emerge. Its shares have strongly outperformed a flat ASX energy index .AXEJ this year, surging 35 percent to Wednesday’s close.

Shareholders are expected to vote on the offer, which needs approval from 75 percent of votes cast to proceed, in late August or September.

Lone Star made an unsuccessful $311 million bid two years ago for Australian gas producer AWE Ltd AWE.AX, which was taken over earlier this year by Japan’s Mitsui & Co for $470 million.