Australia’s Arrow Energy revises up all-cash offer for Bow Energy

26 September 2011 04:56  [Source: ICIS news]

SINGAPORE (ICIS)--Coal seam gas (CSG) producer Arrow Energy said on Monday it will acquire Bow Energy at an increased all-cash offer of Australian dollar (A$) 535m ($530m), or at A$1.52 a share, about 3% higher than its preliminary offer.

In August, Arrow Energy made an initial offer of A$520m or A$1.48 for each share of Bow Energy, which is based in Australia.

The new offer price represents a 72% premium to the closing price of Bow Energy shares traded on the Australian Stock Exchange, before Arrow Energy made a takeover offer, the company said in a statement.

A definitive agreement has been signed on the acquisition, which has the complete backing of Bow’s directors, Arrow Energy said.

“With the backing of its shareholders, Shell and PetroChina, Arrow has the technical capabilities, capital backing, major project experience and LNG marketing ability to facilitate the sustainable growth of Queensland’s CSG and LNG [liquefied natural gas] industry,” Arrow Energy said.

Bow has eight CSG projects in Queensland, within the Bowen and Surat Basins. It is developing commercial CSG production to supply domestic and export gas markets, according to the company’s website.

With Bow, Arrow Energy said it can expand each of the two trains of its proposed liquefied natural gas (LNG) project. Each train is expected to produce 4m tonnes/year of LNG.

 “An Arrow acquisition will provide Bow a clear development path, given we have the technology, funding and guaranteed market to develop the resources,” said Arrow chief executive Andrew Faulkner in the statement.

Bow Energy’s shareholders are expected to vote on acquisition offer in a meeting to be held in December this year, Arrow Energy said.

“The transaction is expected to be implemented in January 2012,” it added.

Arrow Energy has appointed JP Morgan as financial advisor and Allens Arthur Robinson and Blake Dawson as legal advisors on the acquisition of Bow Energy.

($1 = A$1.01)


By: Pearl Bantillo
+65 6780 4359



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