BG goes hostile with its $13.15 billion bid for Australia's Origin Energy

24 June 2008

Mumbai: British gas utility BG Group, which made an A$13.8 billion ($13.15 billion or £6.7 billion) bid for Australia's Origin Energy, today went hostile, saying the Australian company was demanding too high a takeover offer.

BG took its all-cash offer of A$15.50 per share directly to shareholders, saying its offer fairly valued the company.

The bid represents a 48 per cent premium to Origin's closing share price of A$10.47 on 29 April, the last full day of trading before the announcement of BG Group's initial offer.

BG Group, demerged from British Gas in 1997, made the all-cash offer for Australia's biggest coal seam gas producer after Origin rejected a bid approach in May.

Origin spurned BG's offer after it doubled its estimates of gas reserves and projected a 121 per cent increase in its coal seam methane reserves.  (See: BG bids $12.9 billion for Australia's Origin Energy)  

It plans to use gas reserves in eastern Australia to feed a proposed liquefied natural gas (LNG) facility that would supply utilities in Northern Asia.