BG's $13 bn bid for Origin Energy turns hostile
Britain's BG Group turned its takeover offer for Australia's Origin Energy into a hostile bid on Tuesday following Origin's earlier rejection of the proposed $13.1-billion deal.
By Agencies |
SYDNEY: Britain's BG Group turned its takeover offer for Australia's Origin Energy into a hostile bid on Tuesday following Origin's earlier rejection of the proposed $13.1-billion deal.
BG announced it would go direct to Origin's shareholders with the 15.50 dollars a share, all-cash offer for Australia's second largest power retailer.
BG chief executive Frank Chapman said the offer was a 48-percent premium on Origin's share price immediately before the bid was launched and represented full value for its takeover target.
Origin's board has previously said the offer price is too low, but Chapman questioned whether Origin's coal seam gas reserves were as valuable as the company estimated.
He said there were risks involved in the commercialisation of the coal seam gas reserves, which meant investors may find the cash offer attractive.
"In light of this, BG Group considers that Origin shareholders should be given the opportunity to consider its offer," Chapman said in a statement.
Origin advised its shareholders to take no action on the latest offer. BG initially offered 14.70 dollars for each Origin share in April, then increased its bid to 15.50 in May.
Origin shares were up 83 cents or 5.3 percent at 16.35 dollars in early afternoon trading despite a lower overall stock market.
BG announced it would go direct to Origin's shareholders with the 15.50 dollars a share, all-cash offer for Australia's second largest power retailer.
BG chief executive Frank Chapman said the offer was a 48-percent premium on Origin's share price immediately before the bid was launched and represented full value for its takeover target.
Origin's board has previously said the offer price is too low, but Chapman questioned whether Origin's coal seam gas reserves were as valuable as the company estimated.
He said there were risks involved in the commercialisation of the coal seam gas reserves, which meant investors may find the cash offer attractive.
"In light of this, BG Group considers that Origin shareholders should be given the opportunity to consider its offer," Chapman said in a statement.
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Origin advised its shareholders to take no action on the latest offer. BG initially offered 14.70 dollars for each Origin share in April, then increased its bid to 15.50 in May.
Origin shares were up 83 cents or 5.3 percent at 16.35 dollars in early afternoon trading despite a lower overall stock market.
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