Arrow advises shareholders to buy into takeover bid

Adelaide Advertiser
Tuesday 23/3/2010 Page: 43

Arrow Energy Ltd is urging shareholders to accept a sweetened joint takeover bid from Royal Dutch Shell and PetroChina Co Ltd, calling it the right step at the right time. "We believe in a nutshell this creates value now and value ongoing," Arrow Energy's chairman John Reynolds said yesterday. The bid includes a cash component of $4.70 per share, up from the earlier bid of $4.45, and a reworked proposal for Arrow Energy's international business.

RBS Morgans senior oil, gas and energy analyst Nik Burns says that under his valuation the new deal would be worth $5.45 per Arrow Energy share, or $3.99 billion in total. If the proposal clears shareholder and regulatory approvals, Arrow Energy's international business de-merged and listed on the Australian stock market as Dart Energy Ltd. Arrow Energy chairman John Reynolds said the offer was good for shareholders. "Arrow Energy has indeed travelled a clear and very disciplined strategic path and we see this as one more highly successful step in this exciting and ongoing journey," Mr Reynolds said.

"The board strongly believes that this proposal is the right step at the right time, and elegantly combines the present and the future in both benefits and value for our shareholders." If the deal is accepted, Dart Energy will include Arrow Energy's 90% interest in Arrow Energy International Pte Ltd, which holds assets in China, India, Vietnam and Indonesia. Dart Energy will also control farm-in rights into Apollo Gas Ltd's licences in New South Wales and land a $45 million cash injection, and a $27.3 million) loan facility from Shell.