Origin to update soon on BG's bid

By Fayen Wong

PERTH (Reuters) - Australian power producer and retailer Origin Energy Ltd (ORG.AX) is set to announce a decision within days on gas producer BG Group's (BG.L) $12 billion (6 billion pound) takeover bid, with media reporting BG has improved its offer.

The Australian newspaper's online edition, without citing any sources, said Origin was considering a revised offer of over $15 a share. BG's original proposal was pitched last month at A$14.70, a 40 percent premium to Origin's share price then.

Origin declined to comment on the report. Earlier, it sought a trading halt in its shares ahead of an announcement on the bid on Friday.

Analysts said BG, one of the world's largest shippers of liquefied natural gas (LNG), may need to sweeten its offer by as much as 13 percent to A$16.60 a share to win Origin's vast coal seam gas resources in Australia.

BG is seeking to underpin its Asia growth strategy and expand in the LNG industry.

"It's looking increasingly likely that Origin will not be satisfied with the $14.70 offer," Merrill Lynch's Matthew Spence said in a research report.

"We wouldn't rule out BG adding a A$1 a share sweetener," he said, adding BG, which is valued at $87 billion, could afford to raise its bid slightly.

Analysts said BG's original proposal did not reflect Origin's longer-term earnings prospects from its coal seam gas reserves.