Shell refuses to budge on Cove offer

It looks like Royal Dutch Shell does not want to get into a bidding war with PTT Exploration and Production (PTTEP) as the Anglo-Dutch oil titan has said it will not up its offer price for Cove Energy, leaving the Thai group as the firm favourite to take over the AIM-listed oil and gas producer.

PTTEP, which has offered 240p a share for Cove valuing the group at £1.22bn, announced on Monday morning that it is extending its offer deadline from July 13th to July 25th.

Both firms have raised and extended their offers on many occasions, but Shell is now refusing to increase its own above 220p a share, valuing Cove at £1.12bn. Shell's offer deadline will also run to July 25th.

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It comes as no surprise that Cove's management had decided to recommend the offer by PTTEP to shareholders which is 9.1% higher.

Shell said in an afternoon statement: "Shell Bidco has today decided not to revise its offer of 220 pence in cash for each share of Cove, and not take part in the Auction Procedure for Cove."

Cove's shares, which have been trading well above both offer prices for the last few months in anticipation of a higher bid, tumbled after the announcements. By 16:10, the stock was down 13.51% at 238.27p.

Meanwhile, Shell was trading 0.52% higher at 2,304.5p.

BC