Britain's Cove Energy PLC (
), which owns part of a massive natural gas field off the coast
of Mozambique, said Tuesday it accepted a sweetened takeover
offer of £1.12 billion ($1.8 billion) from a unit of Anglo-Dutch
energy giant Royal Dutch Shell PLC (AMS: RDSA).
London-based Cove Energy PLC holds an 8.5 percent stake in
Mozambique's huge Rovuma offshore natural gas basin, a 2.6
million-acre property that holds trillions of cubic feet of
natural gas and is being developed as a liquid natural gas
project for Asian markets.
The $1.8 billion offer is up from an earlier Royal Dutch Shell
offer of $1.6 billion.
If the deal announced Tuesday goes through, it will mean Royal
Dutch Shell has beaten state-controlled Thai company PTT
Exploration & Production PLC in a bidding war for Cove
Energy. It also will mark Royal Dutch Shell's entrance into
Mozambique and Kenya, where Cove Energy holds other
Anadarko Petroleum Corp., which is based in The Woodlands,
Texas, operates the Rovuma property with a 36.5 percent working
interest. Anadarko estimates that Rovuma holds as much as 30
trillion cubic feet of recoverable natural gas resources.
Besides Anadarko and Cove Energy, other partners are Mitsui
E&P Mozambique Area 1 Ltd. with a 20 percent interest, BPRL
Ventures Mozambique BV with a 10 percent stake, Videocon
Mozambique Rovuma 1 Ltd. with a 10 percent stake. Mozambique's
Empresa Nacional de Hidrocarbonetos EP has a 15 percent
The announcement of the deal between Shell and Cove does not
necessarily mean an end to the bidding for the company, though.
And it remains to be seen whether PTT Exploration will raise
its bid for Cove, or if Indian companies ONGC and Gail India,
which have both previously expressed interest in buying Cove,
will make new counter-offers.
The bidding process for Cove has been complicated by a lack of
clarity on how the Mozambique government would apply capital
gains tax to the sale of Cove's assets there. However, the
government did confirm to Cove earlier in April that it would
apply a 12.8 percent tax to its assets, the Financial Times
reported. The confirmed capital gains tax rate may further
encourage counter bids to buy Cove.
Cove Energy shares close up 4.17 percent. Royal Dutch Shares,
which trade in London and Amsterdam, closed up slightly.