bid fails to impress

Bid fails to impressTony Grant-Taylor
October 25, 2006 12:00am
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SANTOS formally put its $1.26-a-share offer for Queensland Gas Company on the table yesterday but the sharemarket continued to thumb its nose at the bid, marking QGC shares up 3¢ to $1.475.

While Santos's offer is at twice the price of QGC's recent rights issue, it is unlikely – subject to Santos substantially increasing its offer – that the stand-off will be broken until QGC releases its target's statement on November 8.
It is suggested that QGC adviser JP Morgan has lined up a number of other groups potentially interested in looking at QGC, though the coal seam gas group's major shareholders have so far indicated they want the group to remain independent.

QGC is keen to gain time so that its hectic drilling program in Queensland's Surat Basin can prove up as much gas as possible to boost its argument that the Santos offer undervalues the company.