BG Group plc has noted the Target's Statement issued by Origin Energy Limited in response to BG Group's takeover offer to acquire all of the issued shares in Origin at A$15.50 cash per share.
BG Group Chief Executive Frank Chapman said, "Origin's response lacks any substance or clarity.
"Origin's Directors simply assert that BG Group's all-cash offer undervalues the company, but there is no evidence or Independent Expert's Report to support this view. Nor is there any forecast or other financial information which could assist shareholders in valuing the company and making a timely and informed decision. Further, Origin has failed to demonstrate any confidence that the coal seam gas 'monetization' process will yield superior value for its shareholders.
"Whilst equity markets and energy prices decline, and coal seam gas companies' share prices fall, Origin is telling its shareholders to wait for an uncertain and unclear outcome from its 'monetization' process and reject the certain value of BG Group's A$15.50 all-cash offer.
"Even though shareholders are being told to wait, they are not materially better informed. The information in the Target's Statement on important issues such as reversionary rights, reserves and development plans is incomplete, inconsistent and confusing. Origin has today confirmed that further information on these matters is being shared with prospective joint venture partners, but still chooses to withhold this information from its shareholders.
"Origin argues that its current market price and brokers' price targets justify a decision to reject our offer. However, these are completely inadequate responses to an all-cash offer which provides a 72% premium. Origin also fails to acknowledge that its share price is fundamentally supported by BG Group's offer. Furthermore, the Target's Statement fails to note that other Australian coal seam gas companies which have announced joint ventures have seen their share prices fall materially from post-announcement levels.
"Origin has disclosed virtually no information about the risks for shareholders if they reject BG Group's offer and retain their shares. The Target's Statement provides scant detail on the company's development plans, is silent on the capital requirements and fails to specify the considerable risks inherent in the as-yet undefined alternative. Furthermore, Origin has acknowledged that it lacks the necessary Liquefied Natural Gas (LNG) development, marketing and operating skills.
"Origin has rejected BG Group's offer but has comprehensively failed to justify its position. We remain confident that our offer represents full and fair value for Origin's shareholders,” concluded Chapman.
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