A WAR of words broke out today after Australian energy firm Origin formalised its rejection of a £6.7 billion takeover move by UK exploration firm BG.
Origin accused BG of trying to buy it on the cheap and told its shareholders to reject the proposal from the UK-based oil and gas explorer.
But BG said Origin’s response lacked “any substance or clarity” and had failed to provide evidence to back its view that BG’s offer undervalued the company.
Oil and gas producer BG is eyeing Sydney-based Origin as a route to expanding its presence in the region and bolstering its assets in coal-seam gas (CSG) – methane gas trapped underground in deep coal seams.
Origin has highlighted the potentially soaring value of its coal seam gas reserves, the value of which it has tested by seeking joint venture proposals to accelerate the “monetisation” of the reserves. It has short-listed a number of projects from major players in the energy industry, each of which has proposed a liquefied natural gas plant using the coal seam gas.
But BG said Origin had failed to tell shareholders whether the coal seam monetisation process will yield superior value.
Chief executive Frank Chapman said: “While equity markets and energy prices decline, and coal seam gas companies’ share prices fall, Origin is telling its shareholders to wait for an uncertain and unclear outcome from its monetisation process and reject the certain value of BG Group’s all-cash offer.”
BG launched a takeover in July after an agreed deal was rejected by Origin at the last minute.