Shell makes 220p-a-share offer for Cove
Shell Exploration and Production (Shell Bidco) has reached an agreement with AIM-listed oil and gas group Cove Energy on the terms of a recommended cash offer of 220p per Cove share, up from the proposed offer of 195p per share back in February.
Shell Exploration and Production (Shell Bidco) has reached an agreement with AIM-listed oil and gas group Cove Energy on the terms of a recommended cash offer of 220p per Cove share, up from the proposed offer of 195p per share back in February.
Shell Bidco, a wholly-owned subsidiary of oil giant Royal Dutch Shell, says that the offer values east Africa-focused Cove at £1,120m and represents a premium of 134% to the closing price of 94p as of December 12th, the day before Cove put itself up for sale.
"Shell's decision to announce a recommended Offer for Cove fits with Shell's strategic aim to drive forward with its investment programme to deliver sustainable and profitable growth," Shell said in a statement.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"The proposed acquisition of Cove's portfolio would mark Shell's entry into exciting new hydrocarbon provinces, in Mozambique and Kenya, with significant potential for new LNG from recent gas discoveries offshore Mozambique, and further complementary exploration positions in East Africa"
The offer is conditional upon the written consent of the Republic of Mozambique's Minister of Mineral Resources (or through one or more delegated representatives).
"The Board believes that the recommended cash offer from Shell Bidco provides very significant value to Cove shareholders. The proposed transaction is in line with the company's long term strategy, as set out in May 2009, of delivering value to shareholders through exploration and appraisal," said Cove's Executive Chairman Michael Blaha.
BC
-
Redundancy on the rise – how to manage a sudden drop in incomeUnemployment and redundancies are higher than a year ago, new figures show. We look at how to protect your finances if you face a sudden loss of income.
-
What is the ideal time to spend on the property market? How you could risk losing thousandsTime on the housing market matters – get an offer too quickly or too slowly and you’ll often find you have to settle for less than the asking price. What is the ideal time for a property to spend on the market?
