Four banks lead loan for BGs Origin bid

Four banks are leading a syndicated loan to finance British gas producer BG Group Plc’s $US12.1 billion ($A12.99 billion) bid approach for Australian utility group Origin Energy, banking sources said.

BNP Paribas, HSBC, Royal Bank of Scotland and Santander are leading the jumbo acquisition financing, banking sources said.

The size of the facility has not been revealed as the bid approach could yet attract a rival offer, sources added.

The company said earlier this week it would finance the all-cash bid with a mixture of existing cash reserves and a syndicated loan.

BG, valued at around $US86.5 billion ($A92.85 billion), approached Origin with a bid proposal worth $A14.70 per share in cash – a 40 per cent premium to Origin’s close of $A10.47 on Tuesday.

Origin has yet to formally respond to BG’s overtures, but analysts said it would be difficult for Origin to reject the bid, given the substantial bid premium.

Origin is the largest holder of coal seam gas resources in Queensland. It is also Australia’s only vertically-integrated energy company with oil and gas production assets accounting for about a quarter of its revenue, helping offset tighter margins in its traditional retail energy business.

Goldman Sachs and Gresham Partners are advising BG. Macquarie is adviser for Origin.

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