25 May 2012

Shell offers to buy Cove for £992m

22/02/2012 Ben Jaglom

Oil giant Shell (RDSB) has offered to buy Mozambique-focused Cove Energy (COV) for £992.4 million.

The offer from Shell was at a price of 195p a share, a premium of 28.5 per cent to yesterday's closing price. The bid will require the consent of Mozambique's Minister of Mineral Resources to proceed. Cove remarked the bid was in 'shareholders' interests' with the board noting they intend to accept the offer.

The announcement follows on from Cove's earlier declaration this January that it intended to sell the company, at which time the shares were trading at a price of 112.5p.

Shell remarked that the offer fits with its 'strategic aim to drive forward with its investment programme' noting that East Africa is a 'major prospective hydrocarbon province' adding that the company already holds interests in Tanzania and that it would bring 'technical expertise', 'marketing and shipping know-how' to Cove.

Yesterday Cove provided an update on its Rovuma Basin block in which it declared that it had found natural gas pay at 577 feet at the Lagosta 3 well. The offer comes at a reasonable premium to Cove's price and has already sent the shares soaring 25 per cent to 193p. Accept.

Tags: Acquisitions on AIM, Oil giant, Oil in Africa

Sector: Mining

Companies: Cove Energy , Royal Dutch Shell 'A'

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