BG Group’s eroding market value could attract “opportunistic” buyers

UK natural gas company BG Group Plc (LON:BG), with a current market capitalisation of USD60bn (EUR45bn), could become a takeover target for big oil firms, following a decline in its valuation by half in less than two years, Bloomberg cited today analysts as saying.

BG, which reported a 26% decrease in its stock price last year, expects project delays to impede its output growth in 2013. Jane Coffey, head of UK equities at investment manager Royal London Asset Management (RLAM), told Bloomberg that there was a danger for the UK firm to be bought by an “opportunistic” large company at a very cheap price.

According to UK investment manager Brewin Dolphin Ltd, US oil group Exxon Mobil Corp (NYSE:XOM) could be interested in BG to help it revive its growth. Nplus1 Singer Advisory LLP believes that UK’s BP Plc (LON:BP) could welcome a combination with BG as it would enable it to contest the European leadership of Anglo-Dutch oil major Royal Dutch Shell Plc (AMS:RDSA).

Neil Burrows, a spokesman at BG, refused to say whether the company was considering a sale. Patrick McGinn, a Houston-based spokesman for Exxon, did not wish to say if the company was interested in buying BG. Bloomberg could not extract a comment from Sheila Williams, a London-based spokeswoman at BP, either.

China Petroleum & Chemical Corp (HKG:0386), or Sinopec, Cnooc Ltd (HKG:0883) and China National Petroleum Corp (CNPC) are also considered to be among the interested buyers. Bloomberg could not contact representatives of the three Chinese companies outside normal business hours.

Enagas-led group withdraws from race to acquire gas network TIGF

A consortium led by Spain’s Enagas SA (MCE:ENG) unveiled its decision not to submit an offer for French oil and gas firm Total SA’s TIGF gas network and storage business as the target does not match its strategy.

The consortium also includes Canadian fund Borealis and two other firms.

The remaining participants in the race are two group of investors. Belgium’s natural gas operator Fluxys Belgium SA (EBR:FLUX) and French state-controlled lender Caisse des Depots et Consignations (CDC) have joined hands with AXA Private Equity, Credit Agricole SA’s (EPA:ACA) Predica insurance unit, CNP Assurances SA (EPA:CNP) and the Abu Dhabi Investment Authority.

The other consortium includes French energy giant Electricite de France SA (EPA:EDF), which has teamed up with Singaporean sovereign wealth fund The Government of Singapore Investment Corporation Pte Ltd (GIC) and Italy’s Snam SpA (BIT:SRG).

The vendor expects firm bids by 4 February, Reuters said previously, citing sources.

The sale of TIGF, announced last autumn, is part of Total’s strategy to sell as much as EUR20bn (USD26.7bn) worth of assets by 2014 to bolster its cash flow and provide funds for substantial investments. According to analyst estimates, TIGF is valued at some EUR2.5bn.