Royal Dutch Shell Plc  .com Rotating Header Image

BG Group wins Shell’s stake in battle for Pure

FT Home

By Elizabeth Fry in Sydney

Published: March 4 2009 02:00 | Last updated: March 4 2009 02:00

BG Group has moved a step closer to acquiring Pure Energy Resources, the Australian coal seam gas explorer, by winning approval for its A$1bn (US$640m) takeover offer from Royal Dutch Shell.

Shell said yesterday that it would accept BG’s A$8.25 per share all-cash bid for its 11.2 per cent holding “in the absence of a superior offer”.

Winning the Shell stake raises BG’s holding in Pure to 40.7 per cent and removes an important obstacle to the UK group’s ability to expand its Australian coal bed methane business.

BG faces competition from Arrow Energy, the Australian gas producer, which launched a friendly cash and share offer for Pure Energy in December.

BG launched an initial offer that valued Pure at A$796m but, after a brief bidding war with Arrow, raised it last week to A$1bn.

This latest raise was made despite BG already having tabled the largest offer, its A$8 per share having trumped Arrow’s bid of A$3 cash plus 1.57 of its shares for each Pure share.

Analysts said that BG’s bid might encourage Shell to make an offer for Arrow, its joint-venture partner in Queensland’s coal seam gas (CSG) business.

The two companies formed the partnership last year to commercialise Arrow’s CSG reserves through a proposed liquefied natural gas development in Queensland

With a 20 per cent stake in Pure, Arrow could still block BG’s takeover, which is subject to the company acquiring 90 per cent of the Brisbane-based group

Arrow’s chief executive for Australia, Shaun Scott, was not available for comment yesterday, but said last week that the company was still considering “all options”.

BG, Shell and Arrow are seeking more reserves to feed proposed liquefied natural gas projects in Queensland that may meet rising demand in North Asia for cleaner-burning fuels.

The country’s reserves of coal bed methane – natural gas found in coal seams – have been a focus of growing international interest.

Pure yesterday reiterated a recommendation from its independent directors that shareholders should accept BG’s offer.

“Pure’s share price is likely to fall if BG’s offer is not successful,” Robert Day, Pure’s chairman, said in the document.

BG’s bid for Pure follows its successful A$5.6bn bid for Queensland Gas Company and a failed attempt to wrest control of Origin Energy, two other Australian companies with CSG assets.

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “BG Group wins Shell’s stake in battle for Pure”

Leave a Comment

%d bloggers like this: