PetroChina and Shell offer $3 billion for Arrow Energy

A consortium comprising Royal Dutch Shell and PetroChina has made a A$3.3 billion ($3 billion) takeover bid for Australia's Arrow Energy.

Brisbane-based Arrow is an integrated Australian energy company focused on the supply of coal seam gas (natural gas trapped in seams of coal) throughout eastern Australia and Asia. 

The consortium is offering shareholders A$4.45 per share plus one share in a new entity comprising Arrow's international business. Arrow had earlier told shareholders it would spin off the international business through an initial public offering.

Arrow Energy's share price rallied 47% on the Australian Securities Exchange yesterday to A$5.11, after reaching an intraday high of A$5.15, making it likely the buyers will have to sweeten their offer if they want to be successful. Arrow's shares have traded as low as A$2.48 in the past 52 weeks.

Shell Energy Holdings Australia is a subsidiary of Royal Dutch Shell that houses the upstream and downstream business of Shell in Australia. The upstream business is based in Perth and employs more than 200 people to find, develop and supply liquefied natural gas, condensates and liquefied petroleum gas for sale to overseas markets and natural gas for domestic customers in Western Australia. Shell Australia's downstream operations consist of its refining and marketing businesses.

Beijing-headquartered PetroChina is a Chinese state-owned enterprise and one of the world's largest oil and gas companies. It is an integrated energy company with operations ranging from upstream oil and gas exploration and production to petroleum refining, petrochemicals, transportation and marketing of natural gas, crude oil, and refined products. It was established as a joint stock company and subsequently listed on the New York and Hong Kong stock exchanges in 2000. In 2007 it was also listed on the Shanghai Stock Exchange. PetroChina's first overseas acquisition came in 2009 when it bought Singapore Petroleum for a total of $2.25 billion.