Shell pulls out of Cove auction

Shell surprised investors yesterday by walking away from the battle to acquire UK-listed Cove Energy, leaving the way clear for Thai rival PTT to 
acquire the company.

Shell had bid 220p-a-share – or £1.1 billion – for Cove which holds stakes in huge new east 
African gas finds. PTT had topped that offer with a 240p bid but investors had anticipated a higher offer from one or both bidders, prompting hedge funds to buy in to Cove stock.

East Africa is set to become one of the world’s largest gas exporters, supplying energy-hungry Asia with liquefied natural gas, a market in which Shell is one of the most experienced players.

Shares in Cove Energy dived by 37.5p, or 13.6 per cent, to 238p while shares in Shell closed up 7.5p at 2,300p.