Origin rejects BG Group takeover

ORIGIN Energy has formally rejected a $13.8 billion hostile takeover bid from BG Group.
Origin rejects BG Group takeover Origin rejects BG Group takeover Origin rejects BG Group takeover Origin rejects BG Group takeover Origin rejects BG Group takeover

BG Group launched its hostile bid of $15.50 cash per share last month, almost four weeks after Origin rejected its unsolicited proposal at the same price.

"In rejecting BG's original proposal at the same price on May 30, 2008, the Origin board gave careful consideration at the time to all relevant information including information that evidenced an increasing appreciation of CSM valuation," Origin chairman Kevin McCann said.

"Subsequent to this rejection, we have witnessed a continued strong interest in the CSM sector, including the announcement by Shell to acquire an interest in Arrow Energy's CSM tenements, and a further 10 percent increase in the West Texas Intermediate spot price to levels above $US140 per barrel," he said.

McCann also said a formal tender would allow Origin to realise the value of its CSM assets.

According to McCann the process is progressing well with the expression of interest closing tonight.

Origin chief executive Grant King said the company reaffirms its proved, provable and possible CSM reserves and has a prime acreage position in Queensland in terms of quality and quantity of CSM resources.

"Notwithstanding BG's contentions, Origin reaffirms its proved, probable and possible (3P) CSM reserves at 10,122 petajoules, as disclosed to the market on May 30," he said.

"The 3P reserves position has been certified by an independent expert, is consistent with the methodology used for other Queensland CSM operators, and is at a rate of increase in line with expectations at this stage of development and growth across the industry."

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