Royal Dutch Shell on Tuesday announced it had agreed to buy Cove Energy, a London-listed company with key operations in East Africa, for GBP1.12 billion (EUR1.37 billion, or US$1.81 billion).
The cash offer worth 220 pence per Cove share is an improvement on Shell’s informal bid worth 195 pence per share made in February. Cove will be taken over by the Anglo-Dutch energy group’s Shell Bidco subsidiary.
“Further to the announcement of a possible offer…for Cove on 22 February 2012, the boards of directors of Cove and Shell Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Shell Bidco for the entire issued and to be issued share capital of Cove,” Royal Dutch Shell said in a statement.
“East Africa is a major prospective hydrocarbon province, which has seen a significant increase in exploration activity in recent years. Shell already has interests in Tanzania, and the acquisition of Cove would mark Shell’s entry into exciting new hydrocarbon provinces in Kenya and Mozambique,” it added.
Cove executive chairman Michael Blaha said the offer provided “very significant value” to his company’s shareholders.