Analysts have written a stream of notes saying the joint bid with PetroChina undervalued Arrow and the length of time the firm has taken to mull over the bid has caused alarm bells to ring. If the offer is rejected it will be a major blow to Shell, which is desperate to set up a base in Australia from which from it can supply the rapidly growing Chinese and East Asian economies.
The firms are likely to make a second bid in the region of £2.25bn if unsuccessful, analysts say.
Shell already owns 30 per cent of Arrow’s assets after snapping them up in a deal two years ago. The takeover would give Shell and PetroChina control of 37 per cent of Australia’s coal seam gas reserves. A spokesman told City A.M.: “This is just speculation. We will comment further at our strategy meeting tomorrow.”