Thailand’s PTT outbids Shell with $1.76 billion offer for UK’s Cove Energy

Thailand state-controlled oil and gas group PTT yesterday offered to buy UK-listed African explorer Cove Energy, for £1.12 billion ($1.76 billion), trumping a £992.4 million ($1.57 billion) bid from Europe's largest oil and gas company Royal Dutch Shell.

The 220 pence-a-share bid from PTT's exploration and production unit, PTT Exploration and Production unit (PTTEP), came just two days after the London-based oil giant outbid an Indian consortium and others in an auction by offering to pay 195 pence for each Cove share. (See: Shell outbids OVL, GAIL for UK's Cove Energy with $1.57 billion bid)

PTT's offer represents a premium of 134 per cent to the closing price of 94 pence per Cove share as of 12 December 2011, the last business day prior to Cove's announcement of the opening of the data room.

PTT Exploration and Production unit said that its offer would be conditional on government approval and recommendation by Cove's management.

Bangkok-based PTTEP is Thailand's national petroleum exploration and production company with more than 40 projects in 13 countries around the globe. Established in 1985 and publicly listed in 1993, PTTEP is the second largest company on the Stock Exchange of Thailand by market capitalisation with a market value of $19.7 billion as of 23 February 2012.

PTTEP is one of the largest producers of oil and gas in Asia. In 2011, PTTEP produced 101 million barrels of oil equivalent and had a 73 per cent share of production in natural gas.

London-based Cove Energy, formerly known as Lapp Plats plc till July 2009, had hired Standard Chartered Bank and Cenkos Securities Plc to launch a sale process, and last month opened a data room for interested bidders.