By James Paton
March 12 (Bloomberg) — Royal Dutch Shell Plc and PetroChina Co. may need to increase their offer by as much as 55 Australian cents a share to A$3.7 billion ($3.4 billion) to acquire Arrow Energy Ltd., said an analyst at RBS Morgans.
Shell and PetroChina may have to sweeten their offer for Arrow to as much as A$5 a share, Nik Burns, a Melbourne-based analyst, said in a note to investors. While the companies may need to raise the bid to at least A$4.80 a share, the transaction is more than likely to proceed, said Burns, who predicted last month that Shell may make an offer for Arrow.
David Williams, a Shell spokesman in the Hague, and Andrew Barber, spokesman for Brisbane-based Arrow, both declined to comment.
Shell and PetroChina offered A$4.45 a share for Arrows Australian coal-seam gas business, the company said on March 8. That values the proposal at about A$3.3 billion. Shareholders would also get stock in a new company comprising Arrows international assets.
If Shell is successful, the company may move fast to acquire AGL Energy Ltd.s coal-seam gas interests in Queenslands Bowen Basin, potentially for A$900 million, Burns said. Sydney-based AGL may sell its 50 percent stake in the Moranbah field should Shell acquire Arrow, it said yesterday.
Shell and PetroChina may be bidding for Arrow as part of a 50-50 joint venture, according to Burns.
–Editors: Alex Devine, Raj Rajendran.
To contact the reporter on this story: James Paton in Sydney at [email protected]
To contact the editor responsible for this story: Amit Prakash in Singapore at [email protected].
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