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The Times: Analysts dismiss possibility of Royal Dutch Shell pursuit of BG Group

September 19, 2006
By Nick Hasell

SUMMER may be over, but City speculators appear to have lost none of their appetite for circulating the sort of low- credibility bid tales more commonly aired in the dog days of August.

The latest hot-money favourite is BG Group, which bounced off its lows last week as analysts returned impressed from a visit to its Lake Charles liquid natural gas plant in Louisiana. Yet the story that briefly caused excitement yesterday was that Shell, Britain’s biggest company, is mulling an offer in the region of 750p, valuing BG’s equity at £25.6 billion. 
More recently, Shell has been linked to a mooted £12.50-a-share offer for Premier Oil, the mid-cap explorer with interests in the North Sea and Vietnam. But talk of a Shell move on BG was given short shrift by analysts, if only because a deal would be dilutive of Shell’s earnings, given that its rumoured prey trades at a higher multiple. All the same, BG advanced 10p to 650p.

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