UK player BG Group today raised its bid for Australian coalbed methane explorer Pure Energy Resources by 25% to A$995 million (US$646 million), trumping a rival bid by Brisbane-based Arrow Energy.

BG said the offer of A$8 per share was unconditional and said it was "significantly superior" to the improved offer CBM specialist Arrow unveiled on 11 February.

Arrow last week topped up its bid for Pure, first launched in December, after BG's surprise rival bid. Arrow's improved bid comprised A$3 cash and 1.57 Arrow shares for every Pure share, which has an implied value of A$7.21 at the close of trade on Monday.

BG said Arrow's cash-and-scrip offer was risky as it relies on a third party to commercialise its CBM and that Arrow might not be able to commercialise its gas reserves should the proposed Gladstone liquefied natural gas project not proceed or be delayed.

An Arrow spokesman told UpstreamOnline that the company had no comment to make at this stage about BG's move.

Arrow later issued a statement to the Australian Stock Exchange saying it was considering its position and would advise the market in due course.

It added that it recommended Pure shareholders take no action in relation to BG's new offer until then.

BG has a 9.7% stake in Pure, while Arrow holds 19.9% and Shell owns 11.2%.

Source: Upstream