-- 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 (RDSB.LN) and
Thailand's PTT Exploration & Production PCL (PTTEP.TH) over
Africa-focused Cove Energy PLC (COV.LN), 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 (CSNA3.BR) 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. (MTW) and Illinois
Toll Works (ITW) 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