THE WALL STREET JOURNAL
MARCH 17, 2009
MELBOURNE, Australia — BG Group PLC moved a step closer to sealing a 1.03 billion Australian dollar (US$677.7 million) deal to buy Australian coal seam gas player Pure Energy Resources Ltd. after rival bidder Arrow Energy Ltd. let its offer lapse.
While Arrow didn’t say what it plans to do with its 20.3% stake in the group, analysts expect the Australian firm — which is backed by Royal Dutch Shell PLC — to sell its stake into BG’s offer. Arrow wasn’t available for comment.
The developments follow a protracted fight for Brisbane-based Pure Energy and come as energy firms look to lock in coal seam gas reserves to feed their planned liquified natural gas plants in Australia’s Queensland state, which will meet energy demand from Asia. Up to five LNG processing plants are slated for construction in the small port town of Gladstone in Queensland state.
Pure Energy directors said they unanimously recommend shareholders accept BG’s offer, which is due to close March 23.
Buying Pure Energy will help BG, which also bought Queensland Gas last year after missing out on a deal with Origin Energy Ltd., to make a final investment decision on its LNG options.
BG, which had a 33% stake in Pure Energy as of March 13, is offering Pure Energy shareholders A$8.25 cash per share if it reaches a 90% stake in the group.
Shell said earlier this month that it would sell its 11% stake in Pure Energy to BG if a higher offer didn’t emerge.
Elisabeth Behrmann contributed to this article.Write to Lyndal McFarland at firstname.lastname@example.org