arrow falls for higher bid - accepted

From the Australian:

"Arrow falls for higher bid as Shell-PetroChina offer accepted"

"...Arrow will announce today that it has extracted several hundred million dollars extra from Shell and PetroChina and will now accept their $3 billion-plus offer for its Australian assets.

Sources close to the bidders described the increase -- from $4.45 a share, or about $3.3bn -- as "modest".

The increased offer, believed to be about $4.70-$4.80 a share, also falls short of some analysts' expectation of a $5-a-share bid, which would have valued the company at almost $3.7bn.

But it is understood Arrow's biggest shareholder, New Hope Coal with 16.7 per cent, has indicated it will accept the new offer. Arrow shares, which have been suspended since Friday, last traded at $5.29.

Start of sidebar. Skip to end of sidebar.
.End of sidebar. Return to start of sidebar.
The difference reflects the estimated value of 55c-75c a share -- about $400m-$550m -- ascribed to Arrow's international assets. It is understood those assets, which include exploration and coal-seam gas projects in China, Indonesia, Vietnam and India, will remain housed within a renamed Arrow under the existing management team and board. An Arrow spokesman was unavailable for comment.

Arrow will now appoint an independent expert to assess the offer on behalf of shareholders.

The takeover must also be approved by the Foreign Investment Review Board. Although FIRB allowed Britain's BG Group to buy fellow coal-seam gas pioneer Queensland Gas for $5.4bn in 2008 -- the presence of the state-owned PetroChina in the bidding joint venture means the Arrow offer will face additional scrutiny.

Informal talks have been held between Shell, PetroChina and FIRB officials, although no formal documents have yet been lodged. Shell and PetroChina, which each own 50 per cent of the bidding vehicle, are expected to make separate applications to FIRB.

Arrow is one of several companies in Queensland with significant reserves of coal-seam gas. Until it received the approach from Shell and PetroChina, it had been negotiating to buy LNG Ltd's Fisherman's Landing liquefied natural gas project at Gladstone in central Queensland. That deal is almost certainly dead, with Shell and PetroChina instead likely to use Arrow's reserves to feed a new LNG plant on Curtis Island.

The plant is one of a dozen planned LNG ventures in Australia. ConocoPhillips of the US and Malaysia's Petronas are among participants in LNG projects based on converting coal-seam gas to liquid form and exporting it."


Thoughts? TBE,sorry pal.

WU