Shell abandons Cove bid
Royal Dutch Shell has abandoned the battle for control of gas explorer Cove Energy, shocking investors and clearing the way for Thai rival PTT Exploration & Production to acquire it.
Investors had anticipated a higher offer from one or both bidders and an auction process had been due to start this week.
PTT is offering 240 pence per share or about $1.9 billion for Cove, which has made huge east African gas finds. Shell had bid 220 pence.
Cove shares closed at 275.5 pence on Friday but after Shell's shock announcement on Monday they dropped 13 per cent on the day to stand at just 238.5 pence.
"Shell Bidco has today decided not to revise its offer of 220 pence in cash for each share of Cove, and not take part in the auction procedure for Cove," Shell said in a statement.
It gave no reason for the decision.
The rival bidders had been heading into the first formal takeover auction for a listed British company since 2008 after a five-month bidding war.
Britain's takeover watchdog ruled on Friday that if neither suitor declared its current offer final before 5pm today, an auction would start the next day, which could involve them submitting bids to daily deadlines until a winner is found.
The two companies have been battling to buy Cove since February.