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BG Group bids 12 bln dollars for Australian energy retailer
LONDON
Petroleumworld.com, April 30, 2008
British oil and gas giant BG Group said Wednesday it had bid 12.1 billion US dollars (7.8 billion euros) in cash for Origin Energy, Australia's second-largest energy retailer.
"BG Group has approached Origin Energy Limited ... with a proposal to acquire all of the shares in Origin," the firm said in a statement.
The announcement came alongside news that BG Group's net profit had soared 77 percent to 767 million pounds (971 million euros, 1.51 billion US dollars) during the first quarter of 2008.
BG Group said it had offered 14.70 Australian dollars (13.67 US dollars) a share for Origin.
The offer, which is subject to shareholder and regulatory approvals, represented a more than 40 percent premium to Origin's closing price of 10.47 Australian dollars on Tuesday.
The Australian group said in a separate statement: "Origin has not yet considered the proposal. Discussions between the parties will take place and shareholders will be advised of the outcome."
BG Group has been active in Australia this year, striking an agreement with Queensland Gas Company Ltd to build a multi-billion US dollar plant in the northeastern state of Queensland.
US broker Citigroup on Tuesday upgraded its recommendation on Origin to "buy" from "neutral" and put a 12-month price target of 11.80 on the stock."Origin's fuel integrated strategy has set the company in prime position against the backdrop of rising electricity and gas prices," it said in a research note.
Citigroup added that Origin has strong near-term earnings momentum and a solid growth outlook, largely owing to a considerable investment in organic growth.
Meanwhile, BG Group said Wednesday that its profits surged during the first quarter of 2008 thanks to increased energy production and record-high prices for commodities, notably oil.
Pre-tax profits rocketed by 70 percent to 1.4 billion pounds in the three months to the end of March, compared with the same period of 2007.
" BG Group has made an excellent start to the year driven by increased production volumes, higher commodity prices and strong first-quarter performance in LNG (liquefied natural gas)," chief executive Frank Chapman said in the results statement.
" We made significant progress in our Asia Pacific strategy with a new LNG supply agreement in Singapore and the completion of our alliance with Queensland Gas Company in Australia."
Story from AFP
AFP 30 1256 GMT 04 08
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