The news source reported that BG Group will probably increase its offer by as much as 13% to A$16.60 per Origin share. Industry analysts believe that BG will sweeten its offer, given its interest in the Australian firm’s coal seam gas reserves, which will reportedly allow BG to meet the growing demand in Asia for liquefied natural gas.
BG’s A$14.70 bid, at a 40% premium to Origin’s closing share price before the proposal, does not reflect Origin Energy’s long-term earnings prospects, according to analysts. Origin has doubled its coal seam gas resource estimates to 10 trillion cubic feet, in early May 2008.
Origin Energy is yet to make a recommendation to its shareholders over BG’s proposal and has reiterated that talks are in progress between the two companies.
