The Shell and PTT fight over Cove Energy draws to a close

The fight between PTT, the Thai firm, and Shell, the oil giant, for the small Cove Energy company is about to come to a close when the auction closes this Tuesday. The UK Takeover Panel took a look into the five month standoff by setting a firm deadline for bids.

Under the ruling of the UK Takeover Panel if a deal is not finalised by the close of July 16th the bidding war will be resolved by an auction at which point one of the bidders will end up with the company.

Analysts have been predicting that an auction will have to take place because neither of the prominent bidders shows any sign of backing away. At the same time, shareholders of Cove are reluctant to accept any new bids because the shares are currently being exchanged well above what the bidding levels are set at.

Only 4% of the shareholders green lighted the Shell offer to purchase the company at 220 pence a share and even less chose to pass the higher bid of PTT to purchase the company for 240 pence per share.

Shell extended its offer yesterday, but it is not expected that the Cove shareholders are going to accept the new offer as the price continues to increase. Cove is located in the Rovuma Basin and harvests natural gas. It would be an extremely positive addition to either portfolio; which is why the auction should be interesting to watch.