SYDNEY, March 16 - BG Plc moved closer to buying Australian coal seam gas producer Pure Energy Resources Ltd for A$1.03 billion ($673 million) after rival bidder Arrow Energy Ltd decided to let its offer lapse.
Arrow said on Monday it will not proceed with the compulsory acquisition of the shares it does not own in Pure, after its cash and stock offer lapsed on Friday. Arrow built up a stake of 20.31 percent in Pure at the end of the offer price, though it already owned 19.9 percent of Pure through a pre-initial public offering investment.
Last month, BG raised its cash offer for Pure to A$8.25 per share, if it received 90 percent shareholder acceptance for its offer [ID:nSYD412531]. BG has received about 33 percent acceptance for its offer and has declared its offer final in the absence of a superior proposal.
"Arrow's offer is now dead, all that is left now for them to do is to accept the offer from BG," one source with the direct knowledge of the matter told Reuters. The source was not authorised to speak to media.
"They will ultimately tip into the offer," the source said.
Royal Dutch Shell which owns 11.2 percent of Pure, has also agreed to accept BG's offer, which would boost BG's holding to about 45 percent.
Both BG and Arrow want Pure's coal seam gas assets in Australia's northeastern state of Queensland to boost their gas reserves and help underpin their proposed liquefied natural gas (LNG) projects.
Arrow is expected to make a hefty profit by selling its holding in Pure, which is worth about A$208 million, as Arrow acquired the Pure stake for less than A$1.00 each. ($1=A$1.53)
Arrow said on Monday it will not proceed with the compulsory acquisition of the shares it does not own in Pure, after its cash and stock offer lapsed on Friday. Arrow built up a stake of 20.31 percent in Pure at the end of the offer price, though it already owned 19.9 percent of Pure through a pre-initial public offering investment.
Last month, BG raised its cash offer for Pure to A$8.25 per share, if it received 90 percent shareholder acceptance for its offer [ID:nSYD412531]. BG has received about 33 percent acceptance for its offer and has declared its offer final in the absence of a superior proposal.
"Arrow's offer is now dead, all that is left now for them to do is to accept the offer from BG," one source with the direct knowledge of the matter told Reuters. The source was not authorised to speak to media.
"They will ultimately tip into the offer," the source said.
Royal Dutch Shell which owns 11.2 percent of Pure, has also agreed to accept BG's offer, which would boost BG's holding to about 45 percent.
Both BG and Arrow want Pure's coal seam gas assets in Australia's northeastern state of Queensland to boost their gas reserves and help underpin their proposed liquefied natural gas (LNG) projects.
Arrow is expected to make a hefty profit by selling its holding in Pure, which is worth about A$208 million, as Arrow acquired the Pure stake for less than A$1.00 each. ($1=A$1.53)
