British natural gas producer BG Group PLC yesterday raised its bid to buy Australia’s Origin Energy Ltd, the country’s second-largest power company, to A$13.8 billion (US$13 billion).
BG Group’s hostile takeover attempt follows a bid last month that was initially endorsed by Origin’s board, but later rejected after a separate deal in the industry caused Origin executives to rethink the company’s value.
BG Group said in a filing yesterday with the Australian Securities Exchange that it was offering A$15.50 per share for Origin, for a total of A$13.8 billion. That’s 5.4 percent more than the A$14.70 BG Group offered in its initial bid.
BG Group said that the offer represented a 48 percent cash premium on Origin’s closing price of A$10.47 on April 29, just before it announced its first offer.
“Recent transactions, analyzed on a comparable basis, confirm that BG Group’s offer provides full value to Origin’s shareholders,” CEO Frank Chapman said.
“It doesn’t need an increase in price — it is a good offer as it stands,” Chapman said.
Origin issued a statement after the new bid that advised shareholders to “take no action at this stage.” Its shares rose more than 5 percent to A$16.36 in trading yesterday.
Origin’s board last month endorsed BG Group’s initial offer, but then changed tack and declined to put the offer before shareholders after news broke of a deal between Malaysia’s national oil company, Petroliam Nasional Bhd or Petronas, and Australian oil and gas producer Santos Ltd.
The A$2.6 billion Petronas-Santos partnership to build a liquefied natural gas plant using coal seam gas set a new benchmark for valuing those resources, analysts said.
At the time, Origin managing director Grant King said the company’s coal seam gas assets made the company far more valuable than the price being offered by BG Group.
BG Group said yesterday that the Santos-Petronas deal was not a relevant price benchmark for Origin’s coal seam gas reserves.
BG Group’s offer is based on a minimum acceptance condition of 50.1 percent.
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