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(forbes) --
Royal Dutch Shell is making a bet on liquefied natural gas (LNG) in East Africa,
bidding to buy Cove Energy for about USD1.56 billion in cash. The bid,
expected to be approved by Cove’s board, would grant Shell access to the Rovuma
Offshore field off Mozambique’s coast, which could hold more than 30 trillion
cubic feet of LNG.
Headquartered in the Netherlands, Shell is looking to
strengthen its position as one of the world’s largest LNG producers, and thus
offered 195 pence per share, a 73.3% premium over Cove’s closing price on
January 4, the last day before the bid was announced, to buy the totality of
shares outstanding.
Shell is looking to tap Cove’s 8.5% participating
interest in Mozambique’s Rovuma Offshore field. While Cove’s board has
preliminarily said it would recommend the offer to its shareholders, Shell noted
it requires written consent by Mozambique’s Ministry of Mineral
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