Shell and PTTEP continue to duel over Cove deal

cove__mikebairdDiscoveries offshore Mozambique have made Cove Energy an attractive prospect with Shell and PTTEP fighting over control of the firm. (Image source: Mikebaird/Flickr)Two of the largest oil industry giants, Shell and PTTEP, look set to continue their fight for Cove Energy after its face-lift in the markets following discoveries offshore Mozambique

Cove’s market value boost generated a considerable amount of interest from several firms, however, only Shell and PTTEP submitted bids for the takeover.

These two firms submitted not just one bid a piece, but two each as they tried to out do each other in an effort to win Cove Energy.

While Shell was the first to submit a bid in February, offering US$1.6 billion for the company, PTTEP upped the ante out bidding its foe by about $1 million. The counter offer from Shell was for $1.8 billion later.

Things seemed settled for Shell as the government of Mozambique gave its bid the nod of approval and Cove’s board recommended the offer to its shareholders until PTTEP once again put a new bid, turning the board and the government off the Shell offer and on to PTTEP’s.

Shell has not given up in its pursuit to acquire Cove Energy, however, and it has extended its offer for the company, giving it a new closing date of June 27, 2012.

While it extended the time for Cove to accept the offer, it did not increase its bid price, although analysts have predicted a change in the coming days.

“I think Shell will come back with a new bid,” Investec analyst Stuart Joyner said recently. “They could possibly pay up to 300 pence per share, possibly more, given the recent series of discoveries.”

Another analyst said the extension of the deadline gave strong indications that Shell was working on an improved offer.

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