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Arrow launches $460 mln takeover bid for Pure Energy


PERTH, Dec 22 (Reuters) – Arrow Energy Ltd (AOE.AX), an Australian coal seam gas producer, has offered A$673 million ($460 million) for fellow coal seam gas firm Pure Energy Resources Ltd (PES.AX) as it looks to boost its reserves.


Australia’s coal seam gas sector has seen a seen a number of multi-billion dollar deals earlier this year as several gloal energy majors, struggling to secure access to conventional oil and gas resources, target coal seam gas as a new feedstock for liquefied natural gas plants.

Arrow Energy, which already owns 19.9 percent of Pure Energy, said the offer is A$2.70 in cash plus 1.21 Arrow shares for every Pure share. Pure has recommended the offer.

The total consideration of A$5.40 per share represents an 81 percent premium to Pure’s last traded price of A$2.98 on Dec. 19 and a 147 percent premium to its one-month volume weighted average share price, Arrow said in a statement.

Shares in Pure Energy jumped 55.7 percent to A$4.64 by 0325 GMT, indicating that investors were not expecting a higher offer. Arrow’s share fell 6.85 percent to a one-week low of A2.04.

The cash component of the offer will be funded via a combination of Arrow’s existing cash reserves and proceeds from the firm’s recent 30 percent sale of its Australian upstream interests to Royal Dutch Shell (RDSa.L).

Arrow Energy said the proposed acquisition would boost its uncontracted proved and probable (2P) gas reserves to more than 2 trillion cubic feet (tcf), which will be sufficient to support a proposed 3 million tonnes per annum liquefied natural gas project that it is involved in as well as existing gas sales agreements.

Arrow is being advised by Wilson HTM Corporate Finance. ($1=1.464 Australian Dollar) (Reporting by Fayen Wong)


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