Australian company Origin Energy urged shareholders yesterday to reject BG Group’s £6.7billion hostile takeover.
It highlighted the potentially soaring value of its coal-seam gas reserves, saying it wanted to test their worth on the open market.
Oil and gas producer BG is eyeing Sydney-based Origin as a route to expanding its presence in the region and bolstering its assets in coal-seam gas (CSG) – methane gas trapped underground in deep coal seams by water.
Origin said oil prices – which have driven up gas prices to record levels – had led to strong interest in its CSG reserves, and it was looking at proposals from third parties “to accelerate their monetisation”. The deadline for expressions of interest closed last night.
BG chief executive Frank Chapman reiterated BG’s offer, saying it was not solely based on CSG resources, adding: “We wish to retain and invest in all of Origin’s businesses in Australia.”
Mr Chapman also questioned whether Origin was able to maximise the potential of its CSG reserves.
He added: “Origin continues to lag its competitors in the exploration and appraisal of its CSG acreage.”
BG launched a hostile takeover with an all-cash offer last month after an agreed deal was rejected by Origin at the last minute. The cash offer is at a 48% premium to Origin’s closing share price on April 29, before the move was announced. Origin changed its mind after details emerged of a deal between Petronas and Australian oil and gas producer Santos.