Shell and PTT Exploration heats up takeover battle Cove Energy
The takeover battle for the UK listed Cove Energy PLC, that has a stake in Mozambique's largest gas field, has intensified between Royal Dutch Shell and Thailand's biggest oil explore PTT Exploration and Production. At present, PTTEP's offer is higher than that of Shell.
It is drawing attention whether Shell can raise its bid. However, Shell has just extended twice deadline for Cove Energy shareholders to June 13th 2012 and June 27th 2012 and not yet referred to its further stimulus measures.
Meanwhile, Shell is said to be considering its options against PTTEP's proposal and might make a further announcement for its countermeasures.
It is estimated that Mozambique's Rovuma Offshore Area 1, in which Cove Energy has an interest of 8.5%, holds 30 trillion cubic feet of recoverable natural gas resources. Anadarko Petroleum Corporation, the operator of these assets, aims to complete a project to produce 10 million tonnes per year of LNG using these gas resources as a feedstock around 2018.
In an effort to further expand its portfolio, the world's leading LNG player Royal Dutch Shell initially offered 195 pence per share of Cove Energy, amounting to GBP 992.4 million in February 2012, which had revealed its intention to be taken over. After discussion, both companies mutually agreed that Shell buys Cove Energy at 220 pence per Cove share for the total amount of 1.23 billion pound and that the deadline for Cove Energy shareholders is set on May 23rd 2012 (local time in London). Shell received approval from the Mozambique Government for the takeover.
However, just before the deadline of May 23rd 2012, PTTEP made a counter bid of 240 pence per Cove share amounting to GBP 1,221.4 million. In Thailand, Map Ta Phut LNG Import Terminal came on stream last May. PTTEP plans to build up LNG value chain from production to importing with its participation in the development of Rovuma Area 1 to cope with growing demand for LNG in Thailand.
Source - TEX Report Limited