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Shell fights on for Cove

Mark Leftly: Sunday 24 June 2012

Royal Dutch Shell is expected to turn up the heat in its battle for Cove Energy, the Mozambique-focused gas explorer that has generated huge interest among the supermajors.

Cove shareholders have until Wednesday to accept Shell’s 220p-a-share bid, which was tabled in April but has since been trumped by an offer of 240p, or £1.2bn, from Thailand’s PTT Exploration & Production. Shell has already extended its offer once, but can do so again as an absolute deadline cannot be enforced until mid-July.

The FTSE 100 stalwart has had only a handful of acceptances, so will have to up its offer if it wants to wrest the Aim-listed group from PTT. Shareholders have been slow to accept either offer as they hope the groups will push each other to something closer to £1.4bn.

East Africa is seen as energy’s next great play, and Cove has an 8.5 per cent stake in a block off Mozambique’s coast that would open the area to the successful bidder.

SOURCE

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