Arrow Energy
(ASX:AOE) is expected to reject a $3.3 billion takeover bid from Royal Dutch Shell and PetroChina because the offer price is too low.
If the takeover is successful, Shell and PetroChina are expected to scrap the proposed Fisherman’s Landing LNG project in Queensland and divert Arrow’s gas reserves into Shell’s planned LNG facility at nearby Curtis Island.
Shares in Australia’s Liquefied Natural Gas Ltd (ASX:LNG), Arrow’s partner in the Fisherman’s Landing project, entered a trading halt this morning pending an announcement about the future of the project.
On March 9, Shell and PetroChina offered Arrow shareholders $4.45 per share, plus a stake in a new Arrow entity.
The Australian Financial Review reports that analysts widely expect Arrow to reject the offer as it does not represent fair value for the company.
Arrow has spent over a week weighing up whether it can deliver better returns to shareholders by pursuing its own LNG plans.
LNG Ltd agreed last month to sell its stake in the Fisherman’s Landing project to Arrow for $51 million.
Arrow Energy booked a profit of $366.85 million for fiscal 2009.
