Shell offer for Cove trumped by PTT's £1.12bn

A takeover battle erupted yesterday for the Mozambique-focused oil explorer Cove Energy, after Shell's £992m bid was trumped by a far bigger offer of £1.12bn by Thailand's state-owned PTT Exploration.

At that price, Cove's chief executive, John Craven, would pocket an extra £2.3m for his stake, on top of the £18m Shell's offer would have given him. Chairman Michael Blaha's £13.5m windfall would become £15.2m and finance director Michael Nolan would get £8m.

However, shares in the company leapt way beyond PTT's offer price of 220p as investors predicted that higher bids would come in from Shell and possibly others.

India's Gail and ONGC Videsh are said by bankers to be still interested in bidding, with speculation rife that two Chinese operators may also join the fray.

Cove, which is being advised by the oil industry doyenne Geraldine Murphy of Standard Chartered,put itself up for sale on 5 January. Since then, large numbers of potential bidders have been looking over the books.

Shares in Cove closed last night at 234.5p – up 21 per cent.

One oil sector banker said that the bumper premium being offered by PTT – which is nearly 13 per cent above the Shell offer – could put off rival bids.

But the battle for Cove has triggered speculation about other bids for oil and gas businesses operating in East Africa, which is tipped by industry experts as being the next big natural gas region.