Gases group BG has upped the ante in the takeover battle for Australian coal seam business Pure Energy.
It has raised its bid for Pure to around £450m, a 15% premium to a rival offer from Australia's Arrow Energy, if it gets 90% acceptances from shareholders. BG's bid is in cash, and has been recommended by Pure's directors. Even before this increase, Arrow had said it was weighing up whether to proceed with its offer, or spend the cash on drilling its own projects.
BG shares are currently down 6p at £10.05, but this is outperforming the overall market. The FTSE 100 continues to struggle after renewed negative sentiment in the banking sector, and is now down 77.91 points at 3837.73. mited. Pure directors have recommended the BG offer and BG now owns 28.9% of Pure. Alan Sinclair at Seymour Pierce said:
"BG will be paying somewhat more than it did for the much larger Queensland Gas Company. However, Pure does have considerable potential upside in its possible resource base and BG is not noted for over-paying for assets. In the context of BG's Pacific Basin LNG expansion, this is a strategically important acquisition being done on sensible terms."
