by Angela Macdonald-Smith (Bloomberg)
Santos Ltd., Australia's third- biggest oil and gas producer, made a formal offer for Queensland Gas Co., which it said values the producer of natural gas from coal seams at A$960 million ($752 million).
Santos also raised the amount of gas it would supply to a Queensland Gas unit as part of the transaction, the Adelaide- based company said today in a statement to the Australian Stock Exchange. The offer is ``clearly superior'' to a rival transaction proposed by AGL Energy Ltd., it said.
Brisbane-based Queensland Gas, or QGC, is being targeted by both bidders as Santos needs more reserves to replace ageing gas fields in central Australia, while AGL wants its own supply for its power stations and retail customers. Santos proposed the offer on Jan. 30, when Queensland Gas said the board needed a firm offer before seriously considering it.
``Santos has structured its offer to provide QGC shareholders with a very attractive cash component and shares in a dynamic new entity that would be led by QGC's Managing Director Richard Cottee,'' Santos Managing Director John Ellice-Flint said in the statement.
Queensland Gas shares fell 0.5 cents, or 0.3 percent, to A$1.53 on the exchange at 2:26 p.m. Sydney time, while Santos shares rose 28 cents, or 2.8 percent, to A$10.25. Shares in Sydney-based AGL Energy, the country's largest energy retailer, rose 2 cents, or 0.1 percent, to A$17.43 at the same. time.
Santos's offer involves A$1.30 a share in cash for all Queensland Gas shares. It plans to incorporate Queensland Gas's more developed fields into its owns business and to spin off the rest in a new company it said is worth about 50 cents a share.
AGL's rival transaction involves buying a 27.5 percent stake in Queensland gas for A$1.44 a share and buying 540 petajoules of gas from the company over 20 years. Queensland Gas's board recommended AGL's offer subject to no higher bid being made. Santos said today it ``looked forward to positive consideration of Santos' formal offer by the QGC board.''
Santos Ltd., Australia's third- biggest oil and gas producer, made a formal offer for Queensland Gas Co., which it said values the producer of natural gas from coal seams at A$960 million ($752 million).
Santos also raised the amount of gas it would supply to a Queensland Gas unit as part of the transaction, the Adelaide- based company said today in a statement to the Australian Stock Exchange. The offer is ``clearly superior'' to a rival transaction proposed by AGL Energy Ltd., it said.
Brisbane-based Queensland Gas, or QGC, is being targeted by both bidders as Santos needs more reserves to replace ageing gas fields in central Australia, while AGL wants its own supply for its power stations and retail customers. Santos proposed the offer on Jan. 30, when Queensland Gas said the board needed a firm offer before seriously considering it.
``Santos has structured its offer to provide QGC shareholders with a very attractive cash component and shares in a dynamic new entity that would be led by QGC's Managing Director Richard Cottee,'' Santos Managing Director John Ellice-Flint said in the statement.
Queensland Gas shares fell 0.5 cents, or 0.3 percent, to A$1.53 on the exchange at 2:26 p.m. Sydney time, while Santos shares rose 28 cents, or 2.8 percent, to A$10.25. Shares in Sydney-based AGL Energy, the country's largest energy retailer, rose 2 cents, or 0.1 percent, to A$17.43 at the same. time.
Santos's offer involves A$1.30 a share in cash for all Queensland Gas shares. It plans to incorporate Queensland Gas's more developed fields into its owns business and to spin off the rest in a new company it said is worth about 50 cents a share.
AGL's rival transaction involves buying a 27.5 percent stake in Queensland gas for A$1.44 a share and buying 540 petajoules of gas from the company over 20 years. Queensland Gas's board recommended AGL's offer subject to no higher bid being made. Santos said today it ``looked forward to positive consideration of Santos' formal offer by the QGC board.''
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