Reuters: Regulatory News: UPDATE 1-Cove says shareholders should accept Shell offer

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UPDATE 1-Cove says shareholders should accept Shell offer May 21st 2012, 16:09 Mon May 21, 2012 12:09pm EDT * Cove board repeats belief that shareholders should accept Shell offer * Says that it is mindful that Shell's is only offer * First deadline for acceptances is May 23 LONDON, May 21 (Reuters) - British oil explorer Cove Energy said shareholders should accept a $1.8 billion takeover offer from Royal Dutch Shell, with just days remaining before a deadline for the deal. The repeat by Cove's board of its recommendation that shareholders accept Shell's offer comes after it said earlier in May that it found even more gas on its licence in Mozambique, a disclosure that could have stoked a bid battle for the company. Oil and gas companies have flocked to East Africa in recent years, seeking exposure to vast gas fields found there that look set to transform the region into a major new energy supplier, but time is running out for a counterbid to emerge for Cove. "The board is mindful that, to date, Shell Bidco is the only firm bidder and that Shell Bidco has already secured the consent of the Government of Mozambique," Cove said in a statement on Monday. "The board of Cove strongly recommends its shareholders to tender their acceptances for the offer as soon as possible." Investors in Cove have until Wednesday to accept Shell's offer, but Cove's statement calls this the first closing date, suggesting there could be an extension to the deadline. Analysts had said a rival bidder could enter the fray, and Cove's shares have traded above the level of Shell's offer since it was made, on hopes of a counterbid from Thailand's PTT Exploration and Production, which last month declined to rule itself out of the race, or another party. Cove, whose shares traded down 1 percent to 223 pence at 1534 GMT, still above the 220 pence level of Shell's bid, declined to comment when asked why it had issued the statement which repeated its earlier position. Shell, which launched its firm offer for Cove in late April in a deal that includes a commitment to cover a tax bill, has been in pole position to acquire Cove since winning the approval of the Mozambique government. Link this Share this Digg this Email Reprints

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