BG Energy acquires control of Pure Energy after acquiring Arrow Energy's stake

British oil and gas group BG now controls more than 90 per cent of Pure Energy of Australia after another Australian company, Arrow Energy, agreed to sell BG a 20.59-per cent stake in Pure, BG and Arrow said in a statement. The transaction values Pure at A$1.03 billion ($729 million). This marks the end of a bidding war between BG and Arrow.

Phil BentleyArrow Energy said it had accepted BG's takeover of Pure Energy, selling the British group its entire stake.

Directors at Pure Energy, which had initially accepted the Arrow bid, later revised their position and agreed to a higher offer from BG. Arrow said it would make a profit of about A$200 million on its investment in Pure.

''In weighing up our options, we concluded that the level of BG's bid had risen to a point where more value can be achieved for Arrow shareholders by accepting BG's offer and investing these funds elsewhere,'' Nick Davies, CEO of Arrow, said in a statement. ''BG's offer for Pure highlights the strategic value of coal-seam gas reserves in Queensland.''

BG had offered 8.25 Australian dollars per share in Pure Energy, or a total of A$1.026 billion (€520 million, $713 million). But it had said it would lower the bid to 8.00 dollars a share if it had not received at least 90 per cent of the capital of Pure Energy at the close of the bid period. With the inclusion of the Arrow stake, that condition was met and BG said it would now pay 8.25 dollars a share. (See:  BG likely to acquire Australia's Pure Energy after upping bid)

BG is paying almost triple the price Pure was trading at before Arrow made an initial offer in December. Under Australian takeover regulations a bidder that gets at least 90 per cent acceptances can compulsorily acquire the remaining shares.