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Shell Extends Offer for Cove at Lower Price Than PTT Bid

Royal Dutch Shell Plc (RDSA) extended its offer to buy Cove Energy Plc (COV), an oil explorer focused on East Africa, without matching PTT Exploration & Production Pcl (PTTEP)’s higher bid for the firm.

Cove shareholders now have until June 27 to agree to Shell’s bid, a second extension after the offer of 220 pence offer was made on April 24. Shell has received 4.8 percent of the shareholders’ acceptances so far, it said today. On May 23, Thailand’s PTT made an offer of 240 pence, valuing Cove at 1.22 billion pounds ($1.9 billion).

Shell Chief Executive Officer Peter Voser declined to comment on the prospect of a higher bid in a Bloomberg Television interview today.

Cove shares are trading above PTT’s offer price, indicating investors expect an improved bid. The stock closed up 0.6 percent at 265.5 pence in London today.

Cove’s largest asset is a 8.5 percent holding in Mozambique’s Rovuma Area 1, where a group led by Anadarko Petroleum Corp. (APC) has found as much as 60 trillion cubic feet of recoverable natural gas, or more than six times the U.K.’s existing reserves. Cove increased its estimate of the find earlier this week, and Mozambique approved PTT’s bid last month.

The discoveries open the way for Mozambique to become an exporter of liquefied natural gas, shipping fuel to Asian economies including India and China. For state-controlled PTT, the purchase of Cove offers Thailand a secure source of gas.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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