Rick Wilkinson
OGJ Correspondent
MELBOURNE, Feb. 18 -- The UK's BG Group has hit back in its battle with Arrow Energy Ltd. of Brisbane to acquire coalbed methane company Pure Energy Resources Ltd. by increasing its all cash offer to just under $1 billion (Aus.).
The British gas major increased its offer to $8/share of Pure Energy from $6.40/share, which values Pure at $995 million. This trumps Arrow's revised cash and share offer lodged last week of $3 cash and 1.57 shares of Arrow for every Pure share.
BG says its latest offer eliminates a number of risks, such as Arrow's reliance on a third party to commercialize its CBM resources and the subsequent risk that it may not be able to develop the reserves if the proposed project (in Gladstone) does not proceed or is delayed.
BG also dismissed concerns about Foreign Investment Review Board approval, saying that the FIRB hadn't objected to the offer for Pure. In addition, BG has waived all other conditions in the offer, including its minimum 51.1% acceptance condition.
BG is widely believed to have made the offer for Pure to increase its CBM resources for its own planned LNG gas project in Gladstone.
Arrow's earlier bid had been recommended by Pure's independent directors, but it remains to be seen how they will respond to BG's come-back offer.
