Origin Energy spurns BG's $13.3 billion hostile bid
04 Jul 2008
Mumbai: Origin Energy Ltd, the biggest producer of coal seams gas (CSG) in Australia, has asked shareholders to reject BG Group Plc's A$13.8 billion ($13.3 billion) hostile takeover bid, saying it is too low.
BG's all-cash offer of A$15.50 a share, announced on 24 June, doesn't reflect the true extent of its gas reserves, Origin said in a statement to the Australian stock exchange.
The bid is 4.8 per cent lower than Origin's closing price on Thursday. The stock closed 13 cents, or 0.9 per cent lower, at A$16.15 in Sydney today. Origin shares had touched a record A$16.49 on 25 June. (See: BG goes hostile with its $13.15 billion bid for Australia's Origin Energy)
Sydney- based Origin, which reported a doubling of its coal-seam gas (CSG) reserves, had spurned a previously agreed approach from BG, UK's third largest gas distributor.
Origin also cited the decision by Malaysian national oil company Petroliam Nasional Bhd to pay $2.51 billion for a stake in a rival LNG project being developed by Santos.
Reading, England-based BG, which is looking at Origin's coal-seam gas resources in east Australia that is expected to feed a proposed liquefied natural gas project in northern Asia, took its offer direct to shareholders after Origin rejected the bid in May.
BG had, in February, formed a venture with smaller coal-seam gas producer Queensland Gas Co to build an A$8 billion LNG export project in Gladstone. The venture is one of five rival projects in the northeastern Australian city based on coal-seam gas.
Origin said it would pursue separate deals with joint venture partners to generate value from its coal seam gas.
The Origin share price has risen by 50 per cent since BG's overtures were first disclosed at the end of April.
