Shell to buy Cove Energy for $1.6 bln

Shell to buy Cove Energy for $1.6 bln

LONDON - Reuters
Shell to buy Cove Energy for $1.6 bln Royal Dutch Shell, the global energy company, has made an agreed 992.4 million pounds ($1.6 billion) bid for Mozambique-focused Cove Energy, offering a full price to open up a new gas frontier for the Anglo-Dutch oil major in East Africa.

Shell has offered 195 pence per share in cash, which Cove’s directors said yesterday in an official statement they would recommend to shareholders.

More than 70 percent premium

On Feb. 21, Cove’s shares closed at 154.5 pence, and analysts at Citigroup said the “valuation looks stretched” in a research note.

The price is an over 70 percent premium to Cove’s closing share price on Jan. 4, when Cove announced plans to sell, although investors were already betting on a bid at that point.