Australia's Origin rebuffs BG bid

By Fayen Wong and Tom Bergin

PERTH/LONDON (Reuters) - Australia's Origin Energy (ORG.AX) said it had shortlisted several potential partners to develop its gas assets as it seeks to fend off a near-$12 billion (6.5 billion pound) takeover bid from BG Group (BG.L).

Origin argues teaming up with a major energy group to build a liquefied natural gas plant that would be fed by its large coal seam gas (CSG) beds may deliver better value for shareholders than BG's A$15.50/share bid.

BG Chief Financial Officer Ashley Almanza criticised the absence of detail on the proposed tie-up and said the gas producer was under no pressure to increase its bid, which closes on September 26.

Origin, a power generator as well as oil and gas producer, said it would put its joint venture proposal to investors before then.

"There's a sense that Origin has gotten quite a positive response on its CSG monetisation process, but that's still in early days so it's hard to decide which is a better option," said Jason Mabee, utilities analyst at ABN AMRO in Sydney.

A banker with knowledge of BG's thinking said last week that if Origin strikes a good joint venture deal then BG would come under pressure to increase its offer, but he cautioned there was a limit to how far BG would chase the deal.

BG has already increased its offer for Origin once and analysts said the company could justify paying A$17-$18/share (9.14 - 9.67pounds/share).

"There's a high chance they will wait until they get more details on the CSG monetisation proposals Origin has received, but they could also make a pre-emptive strike and launch a higher offer," Mabee said.