British oil and gas group BG now controls more than 90 per cent of Pure Energy of Australia after another Australian company, Arrow Energy, agreed to sell BG a 20.59-per cent stake in Pure, BG and Arrow said in a statement. The transaction values Pure at A$1.03 billion ($729 million). This marks the end of a bidding war between BG and Arrow.

Arrow Energy said it had accepted BG's takeover of Pure Energy, selling the British group its entire stake.

Directors at Pure Energy, which had initially accepted the Arrow bid, later revised their position and agreed to a higher offer from BG. Arrow said it would make a profit of about A$200 million on its investment in Pure.

''In weighing up our options, we concluded that the level of BG's bid had risen to a point where more value can be achieved for Arrow shareholders by accepting BG's offer and investing these funds elsewhere,'' Nick Davies, CEO of Arrow, said in a statement. ''BG's offer for Pure highlights the strategic value of coal-seam gas reserves in Queensland.''

BG had offered 8.25 Australian dollars per share in Pure Energy, or a total of A$1.026 billion (€520 million, $713 million). But it had said it would lower the bid to 8.00 dollars a share if it had not received at least 90 per cent of the capital of Pure Energy at the close of the bid period. With the inclusion of the Arrow stake, that condition was met and BG said it would now pay 8.25 dollars a share. (See:  BG likely to acquire Australia's Pure Energy after upping bid)

BG is paying almost triple the price Pure was trading at before Arrow made an initial offer in December. Under Australian takeover regulations a bidder that gets at least 90 per cent acceptances can compulsorily acquire the remaining shares.

The takeover marks a big step in the expansion of BG into Australia, which it sees as a strategic area for development, being rich in oil and gas resources and well placed to supply markets in Asia where demand for energy has risen sharply in recent years.

Last year BG paid $4.9 billion for Australian group Queensland Gas by means of a friendly takeover, having tried unsuccessfully to bid $13.8 billion for another local group, Origin Energy. (See: BG goes hostile with its $13.15 billion bid for Australia's Origin Energy)

''BG Group intends to issue compulsory acquisition notices before the close of the offer'' at 7 p.m. Sydney time on 6 April, according to a statement. BG will nominate three directors to Pure's board starting from tomorrow. BG said in its bidder statement on 17 February it planned to de-list Pure and integrate it with Queensland Gas. BG fell 11 pence, or 1 per cent, to 1,091 pence in London trading as of 12:30 p.m. in London.