Investors punt on Arrow rejecting bid MATHEW MURPHY March 16, 2010 Arrow Energy could reject Royal Dutch Shell and PetroChina's $3.3 billion takeover bid as early as today, as its shares push higher and its liquefied natural gas partner says it is prepared to go it alone on the Fisherman's Landing project.
Arrow shares shot to a year high as the market continued to press the view that the $4.45 a share offer put more than a week ago does not represent fair value for the company. Arrow shares ended yesterday's session almost 1 per cent, or 5, higher at $5.25.
It came as Arrow's partner, LNG Ltd, entered a trading halt, saying it would update the market this morning on its Queensland LNG interests.
LNG's managing director, Maurice Brand, said the company could still renege on a deal struck earlier this year that would give Arrow full control of Fisherman's Landing in return for $51 million to LNG Ltd and $117 million in milestone payments. If the takeover of Arrow is successful, Shell and PetroChina are expected to dump the Fisherman's Landing project and instead channel Arrow's coal seam gas reserves into its own nearby project at Curtis Island in Queensland.
''The Shell/PetroChina bid for Arrow has implications for Fisherman's Landing, depending on which way this whole thing plays out,'' Mr Brand said. ''We can always look at sourcing gas from elsewhere if the Arrow deal doesn't go through.''
An Arrow spokesman would only say that the company would respond to the offer ''later this week''.
The Fisherman's Landing project is intended to produce 1.5 million tonnes a year; Shell's project involves four processing trains producing 4 million tonnes a year each.
The Arrow/LNG offering is the smallest of the Queensland coal seam gas players but would be the first to produce LNG, in 2012.
AOE Price at posting:
$5.25 Sentiment: Buy Disclosure: Held
