Arrow bows to $3.1 bn bid from Shell, Petrochina

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Australia's Arrow Energy Ltd agreed to a fresh takeover offer from Royal Dutch Shell and PetroChina, raised by 6% to A$3.4 billion (USD 3.1 billion) for most of its Australian assets.

The new bid, which would give China its first stake in Australia's burgeoning coal-seam gas industry, followed two weeks of talks after Shell and PetroChina made an offer that investors considered too low.

The takeover needs approval from Australia's Foreign Investment Review Board, which is likely to study it closely after regulators said they wanted to cap state-owned companies' stakes in Australia's top resource firms to 15%.

The fresh offer comes on the same day that China puts four employees of Ango-Australian miner Rio Tinto on trial for bribery and commercial spying, a case that has hurt relations between Australia and China.

Shell and PetroChina are now offering A$4.70 a share in cash for Arrow's Australian assets plus one share in a new listed company to be called Dart Energy, which will house its Asian exploration assets and some Australian assets, Arrow said on Monday.

The bid is pitched at a 35% premium to Arrow's last trade ahead of March 8, when the first offer of A$4.45 a share for the Australian assets was announced.

Arrow Energy's Managing Director Nick Davies told reporters on Monday he was "reasonably confident" that shareholders would approve the revised offer.