Jan. 6 (Bloomberg) -- AGL Energy Ltd., Australia’s biggest electricity and gas retailer, raised its stake in Sydney Gas Ltd. past 50 percent as more shareholders accepted its A$171 million ($122 million) cash takeover offer.

AGL yesterday increased its interest in the Sydney-based producer of gas extracted from coal seams to 54.4 percent, up from 36.2 percent on Jan. 2, according to filings lodged today with the Australian stock exchange.

Buying Sydney Gas will boost Sydney-based AGL’s expansion into coal-seam gas after it agreed last month to pay A$370 million for an exploration venture in New South Wales state. BG Group Plc, Malaysia’s Petroliam Nasional Bhd. and ConocoPhillips are among international companies that invested in Australian coal-seam gas assets last year.

AGL Energy’s offer, of 42.5 cents a share, was 55 percent higher than Sydney Gas’s closing price on Dec. 22, the last full trading day in the stock before the bid. The offer is scheduled to close on Feb. 13.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net

Last Updated: January 5, 2009 18:09 EST