Arrow counters BG with higher offer for Pure Energy
Arrow Energy has sent the ball back to BG of the UK's court by raising its offer for fellow Brisbane CSM player Pure Energy Resources to $7.16 (Aus.)/share and making the bid unconditional.
MELBOURNE, Feb. 12 -- Brisbane-based Arrow Energy Ltd. has sent the ball back to BG Group of the UK's court by raising its offer for fellow Brisbane coalseam methane player Pure Energy Resources Ltd. to $7.16 (Aus.)/share and making the bid unconditional.
The new offer of $3 (Aus.) in cash and 1.57 Arrow shares for each Pure share values Pure at $891 million (Aus.) and represents a 21% increase over its initial offer. It is also 12% above BG's $6.40 (Aus.)/share cash offer announced Feb. 11 that values Pure at $796 million (Aus.).
Arrow's new offer has found favor with Pure's independent directors who hold 12% of the company.
Arrow said since it is the only large independent coal seam methane company remaining in Australia, the share component of its revised offer provides upside potential for Pure shareholders. The company said its new bid is clearly superior to BG's offer and is the only one that provides ongoing exposure to the burgeoning Australian CSM sector.
BG will have to decide whether securing Pure's CSM reserves is worth the higher price it will have to pay to trump Arrow's latest offer. BG also will have to gamble on approval of the Foreign Investment Review Board.