BG Group Climbs on Speculation U.K. Oil Producer May Attract Takeover Bid

BG Group Plc, the U.K.’s third- largest oil and gas producer, surged the most in 17 months in London trading on speculation it may become the next natural resources company to attract a takeover bid.

BG Group rose 61.5 pence, or 6 percent, to 1,091.5 pence, in its biggest percentage advance since March 4, 2009. The company is now worth 36.9 billion pounds ($57.3 billion).

This year is on course to be the busiest for deals involving miners, oil producers and chemical makers, according to Bloomberg data. Korea National Oil Corp. offered $2.9 billion for London-listed oil producer Dana Petroleum Plc today, a bid 20 percent higher than analysts’ target prices. Shares in Soco International Plc, Premier Oil Plc and Tullow Oil Plc all rose in London trading, on a day when the FTSE 100 share index fell to 5195.28 pence, the lowest price since July 20.

Royal Dutch Shell Plc may be considering a 1,600 pence-a- share cash bid for Reading, England-based BG, the Daily Mail reported yesterday, without saying where it got the information. Shell spokesman Kim Blomley declined to comment, as did Neil Burrows, a spokesman for BG.

“BG has been undervalued and oversold in the last few months,” Jason Kenney, head of oil and gas research at ING Commercial Banking, said in a telephone interview from Edinburgh. “While we accept that BG is an attractive operation, we do not see Shell making a move.” Kenney has a “buy” recommendation on BG.

Before today, BG shares had dropped 8.2 percent this year.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net.

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