Arrow Accepts Revised A$3.4 Offer from Shell

Darlington Musarurwa
22 Mar, 2010
New York City

The benchmark stock index and the dollar declined tracking losses in metals and commodities. Arrow Energy recommends A$3.4 billion bid from a joint venture controlled by Royal Dutch Shell and PetroChina. AXA Asia Pacific and NAB extended the A$13.3 billion takeover bid deadline by nine days.

[R]7:00 PM Sydney – The benchmark stock index and the dollar declined tracking losses in metals and commodities. Arrow Energy recommends A$3.4 billion bid from a joint venture controlled by Royal Dutch Shell and PetroChina. AXA Asia Pacific and National Australia Bank extended the A$13.3 billion takeover bid deadline by nine days.[/R]

The Australian stock index declined dragged by commodity stocks as gold prices fell 1.9% to $1,106 per ounce and crude oil prices slipped 0.5% to $80.3 per barrel.

In Sydney trading ASX 200 Index fell 0.9% or 42 to 4,830.20.

Of the ASX 200 index stocks, 45 gained, 138 fell, and 17 were unchanged. FKP Property led gainers in the index shares with a rise of 3.6% followed by Elders Ltd. gaining 3.5%.

The Australian dollar decreased 0.2% to 91.34 U.S. cents.

Arrow Energy Recommends A$3.4 billion Bid

Arrow Energy reported today that its board is recommending the revised A$3.4 billion bid for the company by Royal Dutch Shell and PetroChina.

If successful, shareholders are expected to gain one share in a new listed entity Dart Energy Ltd and cash of A$4.70 per share.

Royal Dutch Shell Plc and PetroChina offered a 35% premium to the Friday’s closing price.

The new entity will be created by a demerger of Arrow Energy’s international business and certain Australian assets into a company to be called Dart Energy, which will be listed on the Australian Stock Exchange.

Dart will comprise 90% interest in Arrow Energy International, which holds the existing international assets in China, India, Vietnam and Indonesia.

Also the new entity will include certain Arrow Energy stakes in listed Australian Stock Exchange companies such as 21.04% in Apollo Gas Ltd, 1.4% shareholding in Bow Energy Ltd and 7.5% shareholding in Liquefied Natural Gas Ltd.

In addition, Dart Energy will have farm-in rights into two of Apollo Gas Ltd’s exploration licenses in New South Wales, Australia, and also entitles it to cash of A$45 million held by Arrow.

Dart will also have a $25 million loan facility from Shell and it will retain its 10% interest in Arrow Energy’s existing portfolio of international assets.

The new entity will be led by the existing Arrow Energy management team.

The bid is subject to Foreign Investment Review Board approval in Australia, customary regulatory approvals in China including approval by the National Development and Reform Commission of China and the State Administration of Foreign Exchange of China.

NAB, AXA Asia Pacific Extend Bid Deadline

AXA Asia Pacific and National Australia Bank announced today that they have agreed to extend the A$13.3 billion takeover bid by nine days to March 29.

Through the transaction, NAB is offering either A$6.43 per share cash or a combination of cash and NAB shares valued at A$6.28.

The Australian Competition and Consumer Commission is expected to rule on the deal on April 22.

ASX 200 index in Australia decreased 42.00 or 0.86% to 4,830.20 and of the stocks in S&P ASX 200 index, 45 increased, 138 declined and 17 were unchanged.

ASX Movers

Incitec Pivot Limited led the decliners in the S&P ASX 200 index with a loss of 5.3% followed by losses in Eastern Star Gas of 4.3%, in Virgin Blue Holdings 4.0% and in Macarthur Coal 3.3%.

FKP Property Group led gainers in the S&P ASX 200 index with a rise of 3.6% followed by gains in Elders Limited 3.5%, in Sundance Resources Limited of 3.3% and in The Reject Shop Limited of 2.3%.

Other Movers

Arrow Energy Limited dropped 3.5% to A$5.10 after the company recommended the revised offer from a joint venture between Royal Dutch Shell and PetroChina.

BHP Billiton plc fell 1.4% to A$42.59 and Rio Tinto Limited fell 1.5% to A$75.03 after commodities and metals declined.

SP AusNet added 1.1% to A$0.88 after the electricity and gas network operator plans to swap loans for bonds to cut financing risks.