Origin again rejects takeover offer from BG

Australian power retailer Origin Energy Ltd., Sydney, has formally rejected the unsolicited $13.8 billion (Aus.) takeover bid from BG Group.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, July 7 -- Australian power retailer Origin Energy Ltd., Sydney, has formally rejected the unsolicited $13.8 billion (Aus.) takeover bid from BG Group.

BG launched its bid of $15.50 (Aus.)/share in cash in late June only a month after Origin rejected the UK firm's original unsolicited proposal at the same price.

Origin said it rejected the original proposal after careful consideration of all relevant information including the fact that there appeared to be an increasing appreciation of the value of coal seam methane (CSM) assets.

Subsequent to this rejection the company maintains it has seen a continued strong interest in the coal seam methane sector and a further 10% increase in the West Texas Intermediate oil spot price to levels above $140/bbl.

Origin Chairman Kevin McCann said the company had now undergone a formal tender process and the time for submitting expressions of interest closed on July 4.

McCann said Origin reaffirms its 3P CSM reserves of 10,122 petajoules (notwithstanding BG's scepticism). These resources have been certified by an independent expert and are consistent with the methodology used for other Queensland CSM operators.

He added that Origin has prime acreage in Queensland in terms of quality and quantity of CSM resources.

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