Shell extends offer deadline to try and win over Cove investors

City A.M. Reporter
ROYAL Dutch Shell has given itself more time to decide the next move in its battle to buy Cove Energy, extending the acceptance deadline on its £1.12bn bid as it vies with Thailand’s PTT for an entry into East Africa's big new offshore gas play.

Shell said yesterday it was extending the deadline for Cove shareholders to accept its 220p per share cash offer by another two weeks until 27 June after receiving valid acceptances for just 4.8 per cent of the shares by the time of the last offer period closing on Wednesday.

Analysts still believe that Shell will increase its bid to trump PTT’s 240p per share offer worth £1.22bn.

Shares in Cove, which have already been trading well above PTT’s offer, closed up 0.4 per cent at 265.1p yesterday, valuing the business at around £1.3bn.

“I think Shell will come back,” Investec analyst Stuart Joyner said. “It could possibly pay up to 300p per share, possibly more, given the recent discovery.”

Cove’s partner in Mozambique, US firm Anadarko, earlier this week announced a further major offshore gas find there.

Analysts at Mirabaud Securities said Shell’s move to extend the offer deadline reinforced suspicions that the company was working on an improved offer.

East Africa is set to become one of the world’s largest gas exporters supplying energy-hungry Asia, after a string of major discoveries across Mozambique and Tanzania, which has attracted the interest of major oil firms.