a higher bid likley, page-16

Interesting artical just out from businessweek.


Shell May Raise Arrow Energy Offer, RBS Morgans Says
By James Paton

March 12 (Bloomberg) -- Royal Dutch Shell Plc and PetroChina Co. may need to increase their offer by as much as 55 Australian cents a share to A$3.7 billion ($3.4 billion) to acquire Arrow Energy Ltd., said an analyst at RBS Morgans.

Shell and PetroChina may have to sweeten their offer for Arrow to as much as A$5 a share, Nik Burns, a Melbourne-based analyst, said in a note to investors. While the companies may need to raise the bid to at least A$4.80 a share, the transaction is more than likely to proceed, said Burns, who predicted last month that Shell may make an offer for Arrow.

David Williams, a Shell spokesman in the Hague, and Andrew Barber, spokesman for Brisbane-based Arrow, both declined to comment.

Shell and PetroChina offered A$4.45 a share for Arrows Australian coal-seam gas business, the company said on March 8. That values the proposal at about A$3.3 billion. Shareholders would also get stock in a new company comprising Arrows international assets.

If Shell is successful, the company may move fast to acquire AGL Energy Ltd.s coal-seam gas interests in Queenslands Bowen Basin, potentially for A$900 million, Burns said. Sydney-based AGL may sell its 50 percent stake in the Moranbah field should Shell acquire Arrow, it said yesterday.

Shell and PetroChina may be bidding for Arrow as part of a 50-50 joint venture, according to Burns.

--Editors: Alex Devine, Raj Rajendran.

To contact the reporter on this story: James Paton in Sydney at [email protected]

To contact the editor responsible for this story: Amit Prakash in Singapore at [email protected].

LINK http://www.businessweek.com/news/2010-03-12/shell-may-raise-arrow-energy-offer-rbs-morgans-says-update1-.html