"We would expect Arrow Energy to accept BG's terms which close...

"We would expect Arrow Energy to accept BG's terms which close by 19.00 Sydney time on 23 March," David Thomas, oil analyst at Citigroup said in a research note.

Last month, BG raised its cash offer for Pure to A$8.25 per share, if it received 90 percent shareholder acceptance for its offer.

BG, which hopes to use Pure's assets to boost its liquefied natural gas business (LNG) in Asia, declined to comment on Arrow's move.

Shares in the British gas producer were up 1.86 percent at 1,041 pence at 1552 GMT, outperforming a 1.1 percent rise in the DJ Stoxx European oil and gas sector index.

BG has received about 33 percent acceptance for its offer and has declared its offer final in the absence of a superior proposal.

"Arrow's offer is now dead, all that is left now for them to do is to accept the offer from BG," one source with the direct knowledge of the matter told Reuters. The source was not authorised to speak to media.

"They will ultimately tip into the offer," the source said.