PTT beats Shell offer for Cove in bidding war
THAI energy giant PTT yesterday trumped Shell’s offer for Cove Energy with a £1.22bn bid.
The board of Cove recommended the new offer – equivalent to 240p per share – leaving Shell to decide on whether to try to outgun PTT.
Cove has an 8.5 per cent stake in massive gas finds offshore northern Mozambique and its east African assets have attracted suitors.
Just hours before a deadline for investors to accept Shell’s £1.1bn bid, the company’s management said that it had switched to the improved offer from PTT.
It had previously supported Shell’s offer, which followed a PTT bid that beat Shell’s opening salvo in February. Cove shares yesterday jumped by more than 10 per cent after PTT’s fresh bid was confirmed.
Whoever buys Cove will have to pay a capital gains tax to Mozambique, which Shell has estimated at around $200m. Cove will also be forced to pay Shell a £11.1m break fee under the terms of the deal agreed in April.
Cove chief executive John Craven and two other directors are in line for a combined windfall of more than £35m under the proposals and the figure ticks up with every bid.
Craven said in a statement yesterday: “The bid from PTT represents significant value for shareholders and confirms the world class nature of Cove’s East African assets.” Cove’s main asset is an 8.5 per cent stake in the Rovuma Offshore Area 1 in Mozambique.