Australia's Origin rebuffs BG's 12b takeover bid
Wednesday, 20 August 2008
SYDNEY, Aug 19 (AFP): Australia's Origin Energy Tuesday formally urged shareholders to reject a 13.8-billion- dollar (12-billion-US) hostile takeover bid by Britain's BG Group.
Australia's second biggest energy retailer said the all-cash offer from global gas firm BG at 15.50 dollars per share undervalued the company and its prospects.
BG said in June it would go directly to Origin's shareholders after the board snubbed a friendly bid at the same price in May. The takeover would be one of the biggest by a foreign company of an Australian firm.
"Origin is a strongly performing, Australian integrated energy company with an impressive track record of growth," its chairman Kevin McCann said in a statement.
"Origin has developed the leading position in Coal Seam Gas (CSG) in Australia and the strength of this position will be a key driver for continuing growth."
The company had shortlisted a number of global partners interested in accelerating development of the CSG reserves, he said.
Australia has huge reserves of CSG, which is methane trapped in coal deep underground. The gas was once considered too difficult to access but technological advances and high world energy prices have renewed interest.
Origin said it planned to provide shareholders with an independent valuation report containing "all relevant information about Origin's value and prospects" before BG's offer closes on September 26.
Shares in Origin, which have consistently traded above the bid price since BG's approach, were 12 cents weaker at 16.04 dollars around midday Tuesday.
A spokesman for BG told Dow Jones Newswires the company was considering its response to Origin's formal rejection of the bid and expected to issue a statement later today.
Australia's second biggest energy retailer said the all-cash offer from global gas firm BG at 15.50 dollars per share undervalued the company and its prospects.
BG said in June it would go directly to Origin's shareholders after the board snubbed a friendly bid at the same price in May. The takeover would be one of the biggest by a foreign company of an Australian firm.
"Origin is a strongly performing, Australian integrated energy company with an impressive track record of growth," its chairman Kevin McCann said in a statement.
"Origin has developed the leading position in Coal Seam Gas (CSG) in Australia and the strength of this position will be a key driver for continuing growth."
The company had shortlisted a number of global partners interested in accelerating development of the CSG reserves, he said.
Australia has huge reserves of CSG, which is methane trapped in coal deep underground. The gas was once considered too difficult to access but technological advances and high world energy prices have renewed interest.
Origin said it planned to provide shareholders with an independent valuation report containing "all relevant information about Origin's value and prospects" before BG's offer closes on September 26.
Shares in Origin, which have consistently traded above the bid price since BG's approach, were 12 cents weaker at 16.04 dollars around midday Tuesday.
A spokesman for BG told Dow Jones Newswires the company was considering its response to Origin's formal rejection of the bid and expected to issue a statement later today.