BG presents rival bid for Pure Energy
BG Group has started a bidding war for Brisbane-based Pure Energy Resources, a coalseam gas producer with interests in Queensland and Tasmania, by offering $796 million (Aus.) in cash.
Uchenna Izundu
OGJ International Editor
LONDON, Feb. 9 -- BG Group PLC has started a bidding war for Brisbane-based Pure Energy Resources Ltd., a coalseam gas producer with interests in Queensland and Tasmania, by offering $796 million (Aus.) in cash.
BG's offer trumps that of Arrow Energy Ltd., Brisbane, which is 19% lower in value and is a combination of cash and shares.
BG is keen to build its gas assets in Australia to underpin its LNG projects in the country; this is the third takeover in Australia in the past year which has focused on coal seam methane gas.
BG is offering $6.40 (Aus.)/share, compared with the $2.70 (Aus.) in cash plus 1.21 of its shares that Arrow made in December.
Pure, which has previously recommended Arrow's offer, is now evaluating BG's bid and asked shareholders to take no action.
"BG Group's offer gives Pure shareholders the certainty of cash at a time of heightened uncertainty in world equity and financial markets," BG said.
By 2020, LNG demand is forecast to more than double because of an increase in energy consumption and the need to have environmentally friendly fuels.
BG's offer requires a 50.1% acceptance unlike Arrow's proposal, which requires a minimum acceptance of 90%.
Contact Uchenna Izundu at uchennai@pennwell.com.
