BG Rises to 3-Month High on Bid Speculation After CEO Exit
BG Group Plc (BG/) rose to the highest in more than three months in London after analysts said the U.K.’s third-largest gas company could become a takeover target after the chief executive officer’s surprise resignation.
BG climbed 3 percent to 1,180.5 pence, the highest price since Jan. 24, valuing the company at 40.2 billion pounds ($67.7 billion).
Exxon Mobil Corp. (XOM), Royal Dutch Shell Plc (RDSA) and Chevron Corp. have the capacity to bid for BG after Chris Finlayson resigned yesterday, said Peter Hutton, a London-based analyst at RBC Capital Markets. The company may sell some oil and gas assets in Brazil or Tanzania, Deutsche Bank AG said.
“With around $200 billion in treasury shares, Exxon Mobil is mechanically better placed” for a cash and stock offer for BG, Hutton wrote in a report. “Without a management track record and undergoing fundamental review of its plans, it is now more plausible to see BG as a potential acquisition target.”
Finlayson’s departure comes as bids for large European companies including drugmaker AstraZeneca Plc (AZN) and Alstom SA (ALO) show an increased appetite for deals. BG, which plans to start its first liquefied natural gas plant in Australia later this year, in February reported a quarterly loss for the first time since 2000.
The company, which expects to become the world’s largest publicly traded seller of LNG in 2017, yesterday said that the CEO resigned for personal reasons after a little more than a year in the job. He has been replaced by Chairman Andrew Gould until a permanent successor is found.
BG yesterday also ditched an output forecast for 2015 that’s just three months old. At the same time, the directors reiterated their commitment to the Reading, England-based company’s strategy presented by Finlayson in May.
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