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Shell to buy Cove Energy for $1.8 billion

A Shell logo is seen at a petrol station in London April 28, 2010. Credit: Reuters/Toby Melville

LONDON | Tue Apr 24, 2012 2:45am EDT

(Reuters) – Royal Dutch Shell Plc (RDSa.L) said it agreed to buy Mozambique-focused explorer Cove Energy (COVE.L) in a 1.12 billion pound ($1.8 billion) recommended cash deal, after the major raised its previous offer to match a rival bid from Thailand’s PTT PTTE.BK.

Shell said it would pay 220 pence for each Cove share and that the deal was conditional upon approval from the government of Mozambique amongst other things.

Cove’s main asset is an 8.5 percent stake in the Rovuma Offshore Area 1, in Mozambique, where huge gas discoveries have been made.

Thailand’s PTT made a 1.12 billion bid for Cove in February, trumping Shell’s previous offer of 992.4 million pounds, and prompting hopes of a bid battle.

($1 = 0.6213 British pounds)

(Reporting by Sarah Young; editing by Rhys Jones)

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