UK Regulator Sets Shell, PTT Jul 16 Deadline For Cove Offers
07/13/2012| 04:03am US/Eastern
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-- UK Takeover Panel sets Shell, PTT July 16 deadline for Cove offers
-- The sale of Cove will be decided by auction if no offer is accepted by this date
-- Previous auctions have seen offers rise by 4% to 18%, said Investec
By Sarah Kent
(Adds detail, analyst comment)
LONDON-- U.K. regulator, the Takeover Panel, Friday waded into the takeover battle between Royal Dutch Shell PLC (>> ROYAL DUTCH SHELL PLC-B) and Thailand's PTT Exploration & Production PCL (PTTEP.TH) over Africa-focused Cove Energy PLC (>> Cove Energy PLC), giving the companies a deadline of July 16 to make their final offers.
If no offer is accepted by this date, the sale of Cove will be decided by an auction on July 17, the Takeover Panel said in a statement. The regulator's intervention will draw to a close a months-long contest between the two companies for the prize of potentially-lucrative natural gas discoveries in Africa.
Cove's main asset is an 8.5% stake in a gas discovery off Mozambique's coast. It also has interests in Kenya and Tanzania. An acquisition of Cove, a modestly-sized exploration company listed on London's junior exchange, is seen as particularly desirable as it would offer energy companies a speedy way to gain a foothold in the region.
However, to date, neither Shell nor PTT has managed to gain a substantial proportion of acceptances from shareholders, despite both contenders repeatedly extending the deadline on their offers.
On Monday, PTT said it had received acceptances from just 0.25% of Cove's investors for its offer of 240 pence a share, while Shell has said its 220 pence-a-share offer has been accepted by 3.27% of shareholders. Cove's board has recommended the PTT offer.
Under an auction process, Shell and PTT would be permitted to submit revised offers on a daily basis, provided both companies change their terms. If neither party revises its offer on July 17, the auction would end that day.
Once an offer is changed, the Takeover Panel said there would be a seven-day period in which a counter-offer could be put forward and a 14-day period for the offer to be declared unconditional. The regulator has the option to put a final deadline on the auction.
According to analysis by Investec, similar auctions in the past have resulted in an average increase over the previous highest offer of between 4% and 18%. However, it cautioned that such auctions occur only sporadically.
Other high-profile auctions have included the competition between Tata Steel Ltd (500470.BY) and Companhia Siderurgica Nacional (>> Companhia Siderurgica Nacional) for Corus in 2007, which Tata won after upping its offer from 500 pence a share to 608 pence a share in a process that lasted 8 rounds. In 2008, Manitowoc Co. (>> Manitowoc Company, Inc.) and Illinois Toll Works (>> Illinois Tool Works Inc.) entered into a single-round auction for Enodis, which Manitowoc won after it increased its offer 11.6% to 328 pence a share from 294 pence a share.
Shell, PTT and Cove have all agreed to the Takover Panel's terms, the regulator said.
At 0746 GMT, shares in Cove were up 1.8% at 279 pence a share, outperforming the rest of the market
Write to Sarah Kent at sarah.kent@dowjones.com
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