British gas producer BG Group launched a A$5.6 billion (€2.71 billion) friendly takeover bid for Australia's Queensland Gas Co Ltd (QGC), its latest effort to boost its position in Asia's fast-growing natural gas market.
"It's a good deal and a fair price for QGC. It is definitely hard to see anyone coming over the top for QGC," said Ivor Ries, senior analyst at EL & C Baillieu Stockbroking.
BG, which acquired a near-10 per cent stake in QGC in February, offered to pay A$5.75 each for the shares it didn't already own, an 80 per cent premium to QGC's last traded price, the two firms said in a joint statement today.
BG will also buy a 22 per cent stake in QGC held by Australia's top energy retailer AGL Energy, with AGL set to receive A$1.18 billion.
QGC shares jumped 80 per cent on resuming trade to match the offer price, having been placed on a trading halt last Friday pending the announcement.
QGC said its voting directors had unanimously recommended BG's bid and that total acceptances, as well as declared acceptance intentions, from directors and institutional investors, would give BG a 46.2 per cent stake in the firm.
The deal comes less than two months after BG abandoned its A$13.8 billion hostile bid for Australia's second-largest energy retailer Origin Energy Ltd, which holds the country's largest amount of coal seam gas reserves.
"Some shareholders may have preferred to see the fruition of the proposed LNG (liquefied natural gas) project but that's a long wait and the current financial crisis is giving too much uncertainty," Ries added.
BG said its offer for QGC was final in the absence of a higher competing bid.
AGL was up 4.55 per cent at A$14.01 by 3.47am, after touching a near three-week high of A$14.19, while BG fell 7.4 per cent in London trading yesterday.
BG already has a partnership with QGC to build a $8 billion LNG plant in Australia's northeastern state of Queensland using QGC's coal seam gas as a feedstock. The plant will have a capacity of 7.5 million tonnes per annum.
Reuters