Australia's gas and electricity giant Origin Energy has reiterated its call for shareholders to reject BG Group's A$13.8bn (£6.4bn) hostile takeover bid, emphasising that options are still open for other types of commercial partnership.
In the run-up to the expiry of BG's A$15.50 per share offer next month, Origin said yesterday that it has a shortlist of potential partners, and a range of tie-up options, focusing on extracting liquefied natural gas (LNG) from the group's coal seam gas (CSG) reserves. But BG dismissed the comments as lacking "any substance or clarity".
Origin gave no details on the interested parties, although recent rumours have named BP and Royal Dutch Shell. Kevin McCann, Origin's chairman, said: "A formal process was initiated in June to seek proposals to accelerate the development of Origin's CSG reserves and we have short-listed a number of global participants in the energy industry, each of which has proposed a CSG to LNG project."
The company is also to provide shareholders with an independent experts' report on the company's stock valuation before the 26 September offer deadline.
Mr McCann said: "Shareholders should be aware that the average broker 12-month share price targets, ranging from A$17.01 to A$20.00, are materially above BG's offer. Furthermore, Origin's average daily share price has been above A$15.50 since Origin's rejection of this price on 30 May."
But BG is not impressed – claiming that it is its offer that is holding up Origin's value. Frank Chapman, the chief executive, said: "Origin's directors simply assert that BG Group's all-cash offer undervalues the company, but there is no evidence to support this view. Nor is there any forecast or other financial information which could assist shareholders in valuing the company and making a timely and informed decision."
Andrew Whittock, an analyst at Oriel Securities, said: "There may be a number of ways of getting higher value for Origin's gas assets whilst leaving the existing management – who are perceived quite highly in Australia – in control, which would be a win-win situation for everyone except BG."
BG Group's share price closed down 5p at 1,094p.Reuse content