May 08 - Update on BG Group plc proposal to acquire Origin Energy Limited

Source Press Release
Company BG Group 
Tags Deals
Date May 09, 2008

On 30 April, 2008 BG Group plc made an announcement to the London Stock Exchange that it had approached  Origin Energy Limited (“Origin”) “with a proposal to acquire all of the shares in Origin at a cash price of A$14.70 per share”.

The announcement stated that:

“The proposal is subject to shareholder and regulatory approvals and other terms and conditions common to transactions of this type.

Origin has not yet considered the proposal. Discussions between the parties will take place and shareholders will be advised of the outcome.”

That announcement followed an announcement made by Origin to ASX on 30 April 2008.

This announcement (9 May 2008) is made in response to a request from the Australian Securities and Investments Commission (“ASIC”) for publication of further information in relation to BG Group’s announcement on 30 April, 2008.

Further Information

Pursuant to the request from ASIC, BG Group notes as follows:

The Proposal made to Origin of a cash price of A$14.70 per share was explicitly made on the basis that it was subject to contract, confidential and to be implemented co-operatively and expeditiously by way of a scheme of arrangement to provide a number of benefits to BG Group and Origin in terms of value, transaction certainty, structuring and timing.

The Proposal contained no due diligence condition but required the confirmation of certain assumptions made in respect of possible third party rights, commitments, liabilities, litigation or financial exposures and set out an expedited timetable for reaching agreement on a merger implementation agreement.

The Proposal was stated to be subject to certain regulatory and other approvals and specifically noted that the acquisition will be conditional on approval (or “no action” letters) from all relevant regulatory bodies, including:

The Australian Competition and Consumer Commission, Foreign Investment Review Board and, if necessary, the Australian Securities and Investments Commission; and

The New Zealand Minister of Energy, New Zealand Takeovers Panel (“NZ Panel”) and New Zealand Overseas Investment Office.

The Proposal noted that it would likely require the approval of BG Group shareholders as a Class 1 transaction in the United Kingdom and it was intended that this approval would be secured prior to the scheme vote by Origin shareholders.

The Proposal noted that BG Group had already secured the necessary in-principle funding commitments from a syndicate of banks. Since the date of the Proposal,  BG Group has received signed commitments from these banks.

The Proposal is subject to contract, is incomplete and may ultimately contain the conditions described above, as well as additional conditions. BG Group’s proposal is to proceed by way of a scheme of arrangement, which requires Origin’s agreement and co-operation, and therefore at this time BG Group is not able to describe the conditions of a scheme of arrangement with any certainty.

BG Group has made a confidential submission to the NZ Panel.  BG Group notes that it received yesterday a ruling from the NZ Panel concerning Contact Energy Limited which will be the subject of a separate announcement to be agreed with the NZ Panel.

Since the date of the communication of the Proposal to Origin, discussions have been held between senior representatives of Origin and BG Group in relation to the Proposal. Those discussions are ongoing but currently inconclusive.

A further announcement will be made by BG Group as appropriate at the earliest practicable date.

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