BG Group Makes A$13.8B Pass at Origin Energy

BG Group plc has announced its intention to acquire all of the issued shares in Origin Energy Limited at A$15.50 cash per share by way of a formal off-market takeover bid. The all-cash bid capitalizes Origin's ordinary equity at approximately A$13.8 billion (£6.7 billion) fully diluted. 

The offer price represents a 48% premium to Origin's closing price of A$10.47 on 29 April 2008 –
the last full day of trading before the announcement of BG Group's initial approach on 30 April
2008 – and a 72% premium to Origin's 90-day Volume-Weighted Average Price (VWAP) on 29
April 2008.
BG Group's offer price will be adjusted for any 2007/8 final dividend and any other distribution or
return to Origin shareholders.
BG Group believes that its offer represents a material premium for Origin shareholders which
reflects the value of Origin's integrated energy business and its longer-term prospective coal seam
gas (CSG) development. BG Group believes that a detailed and careful analysis of the technical,
financial and commercial risks associated with the commercialization of Origin's CSG resources
will confirm the attractiveness of its immediate all-cash offer.
In light of this, BG Group considers that Origin shareholders should be given the opportunity to
consider its offer.
"Origin has good retail, power generation and exploration and production businesses," said BG Group CEO Frank Chapman. "BG Group has performed a thorough and balanced assessment of Origin's prospects and is offering an all-cash 72% premium to the 90-day VWAP to the date immediately prior to the announcement of our initial proposal.
"Recent transactions, analyzed on a comparable basis, confirm that BG Group's offer provides full
value to Origin's shareholders. We believe Origin shareholders have limited visibility of the risks
inherent in Origin's current reserves position and Liquefied Natural Gas (LNG) joint venture
alternatives. Today, Origin does not have sufficient CSG reserves for a LNG joint venture: there
are third-party contractual rights over a large number of Origin's tenements that have not been
adequately explained; and Origin's domestic market requirements from CSG exceed the
company's currently available proven reserves.
"Furthermore, there are currently no operating CSG to LNG plants anywhere in the world;
competing projects in Australia are more advanced; and many billions of dollars of capital
investment would be required.
"Under Origin's proposed CSG joint venture, shareholders would therefore bear protracted and
material technical, project execution and commercial risks; and such a project, even if successful,
would be unlikely to generate any revenues until 2015 or 2016 at the earliest. We would contrast
these points with the certainty of our 72% premium, all-cash offer."



Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Columbia, SC
Project Manager
Expertise: Engineering Manager
Location: Atlanta, GA
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Raleigh, NC
search for more jobs

Brent Crude Oil : $51.46/BBL 0.61%
Light Crude Oil : $50.52/BBL 0.64%
Natural Gas : $2.83/MMBtu 5.35%
Updated in last 24 hours