BG Makes Hostile A$13.8 Billion Cash Offer for Origin

By Clyde Russell

June 24 (Bloomberg) -- BG Group Plc made a A$13.8 billion ($13.1 billion) hostile offer to buy Origin Energy Ltd., Australia\'s biggest producer of gas from coal seams, after an earlier attempt at an agreed transaction was rejected.

BG will bid A$15.50 a share in cash for all of Origin\'s stock, the Reading, England-based company said in a statement sent today to the Australian stock exchange. Sydney-based Origin turned down BG\'s approach at the same price per share on May 30, saying it didn\'t fully value its coal-seam gas reserves.

BG wants to buy Origin to gain gas resources in eastern Australia that may feed a proposed liquefied natural gas project supplying utilities in northern Asia. Petroliam Nasional Bhd., Malaysia\'s national oil company, agreed on May 29 to pay $2.51 billion for a stake in a rival LNG project being developed by Santos Ltd.

``Recent transactions, analyzed on a comparable basis, confirm that BG Group\'s offer provides full value to Origin\'s shareholders,\'\' BG Chief Executive Officer Frank Chapman said in the statement. Origin\'s shareholders should have the opportunity to consider BG\'s offer, he said.

Origin shares closed at A$15.52 yesterday, having risen from A$10.47 on April 28 prior to BG\'s first approach at A$14.70. The stock reached a record high of A$16.32 on June 2.

BG said it will fund the bid with its own cash and a syndicated loan arranged by Banco Santander SA, HSBC Holdings Plc, Societe Generale and Royal Bank of Scotland Group Plc, according to the statement.

To contact the reporter on this story: Clyde Russell in Sydney at