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Perth/London: British gas producer BG Group has made a $12.1 billion bid approach to Australian utility and emerging gas player Origin Energy.
The companies said BG, valued at around $86.5 billion, had approached Origin with a proposal of A$14.70 per share in cash - a 40 per cent premium to Origin's close of A$10.47 on Tuesday.
BG said it would fund the purchase with cash and debt, as it announced a forecast-beating 78 per cent rise in first-quarter profits to £767 million ($1.52 billion), helped by a tripling in profits trading liquefied natural gas (LNG) in Asia.
One dealer said the bid looked expensive and BG shares traded down 0.15 per cent at 1,306 pence at 0815 GMT despite topping earnings forecasts by 11 per cent.
Analysts have seen Australia's north-west shelf as a key gap in BG's portfolio. A purchase of Origin, which holds 4,578 petajoules of proved, probable and possible (3P) gas reserves, could enable BG to better exploit the fast-growing Pacific Basin LNG market.
"Its a pretty high price and premium. And it's all cash so its going to be hard for Origin to turn it down," said Sydney-based Jason Mabee, a utilities analyst at ABN Amro.
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