Origin Energy petitions Takeovers Panel from letting BG take its bid to shareholders

26 July 2008

Origin Energy Ltd, the biggest producer of coal seams gas (CSG) in Australia, rejected a hostile bid from British company BG Group earlier this month terming it as too low. Now, the company wants the Australian Takeovers Panel to stop the bidder's statements from being sent to its shareholders, saying the document contains deficiencies about the value and security of its assets. (See: Origin Energy spurns BG's $13.3 billion hostile bid)

The bidder's statement has been served on Origin and lodged with the Australian Securities and Investments Commission (ASIC) and the Australian stock exchange (ASX) but has not yet been dispatched to Origin shareholders.

The British company, which is offering $15.50 a share for Origin, in the document queries Origin's use of a $2.51 billion coal seam gas transaction between Santos and Petroliam Nasional Bhd (Petronas) to justify rejecting the bid. It also highlights rights held by third parties over some Origin reserves.

In its submission to the Takeovers Panel, Origin claims BG's statements on the Santos-Petronas deal and the so-called reversionary rights are "misleading". Origin submits BG has also inadequately disclosed its intentions towards the CSG assets.

Origin told the panel that BG's bidder's statement put a question mark over the security of Origin's permits in the Surat and Bowen basins in southern Queensland, which it said was misleading. It wants the regulator to require BG to lodge a replacement bid document, and to block BG sending to shareholders an amended version issued on Thursday.

The decision to invoke the panel could be construed as a delaying mechanism to allow Origin to find a buyer or joint venture partner for some or all of its CSG assets. Any delay to BG's dispatch gives Origin more time to sort out its options and the panel normally takes three or four days just to decide whether to appoint a sitting panel and examine the proceedings.