PTT's $1.9 billion bid for Cove trumps Shell

Wed May 23, 2012 6:12am EDT
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By Tom Bergin and Sarah Young

LONDON (Reuters) - Thailand's PTT Exploration and Production stoked the bid battle for Cove Energy on Wednesday, topping Royal Dutch Shell with a 1.22-billion-pound ($1.9 billion) offer that underscores interest in new east African gas finds.

Cove shares jumped as much as 11 percent to 249 pence, above PTT's offer of 240 pence a share and signaling investors expect Shell to come back with a higher bid.

"Clearly the game is not yet over," analysts at Singer Capital Markets said in a research note.

East Africa is set to become one of the world's largest gas exporters, executives operating in the region believe, after a string of major discoveries across Mozambique and Tanzania. That has fuelled speculation of a wave of takeover deals involving companies active there.

Cove has an 8.5 percent stake in massive gas finds offshore northern Mozambique. Project leader Anadarko Petroleum plans to build large plants to freeze the gas to liquefied natural gas (LNG) for export in ships.

PTT sees Cove as an opportunity to secure energy resources to help power Thailand's economy. Shell hopes Cove will be a springboard to a major presence in east Africa.

Cove management said hours before of a deadline for investors to accept Shell's bid that it had switched to back the improved offer from PTT.

It had previously supported Shell's offer, which followed a PTT bid that trumped Shell's opening salvo in February.   Continued...