BANGKOK/SINGAPORE PTT (PTT.BK), Thailand's top energy company, has offered to buy out Singapore-listed Sakari Resources Ltd SAKR.SI for $960 million as the oil and gas firm expands into coal to meet rising regional demand for the fuel.
Hungry for growth, Asia-Pacific's third-largest listed oil and gas firm by market value aims to invest over $11 billion in energy assets in 2012-2016 and has said it wants to boost coal output by more than six-fold by the end of the decade.
PTT, through unit PTT Asia Pacific Mining Pty Ltd, already controls about 45.27 percent of Sakari Resources, which operates coal mines in Indonesia.
The offer price of S$1.90 in cash for the shares it does not own represents a 27.5 percent premium to Sakari's last traded price on Friday and sent Sakari's stock soaring as much as 28 percent to S$1.905 on Monday.
Before the announcement, Sakari shares had fallen around 19 percent so far this year.
"Sakari's valuations are not demanding and PTT seems to want to diversify its resource base and income stream," said Carey Wong, an analyst at OCBC Investment Research in Singapore.
PTT Chief Financial Officer Surong Bulakul said that PTT's primary aim was to raise its holding to more than to 50 percent to have management control.
"We want coal to be one of our core businesses in the future," he told reporters.
PTT has said it is keen to boost its coal output to 70 million tonnes in 2020 from 11 million tonnes this year.
PTT shares were up 0.6 percent at the midsession break, while Bangkok's main index was barely changed.
On August 13, Sakari announced a joint venture with the Royal Group of Cambodia to explore coal opportunities in Cambodia, its first move outside Indonesia and into one of Southeast Asia's new mining frontiers.
The Sakari deal is however only one of many irons PTT has in the fire.
Its key upstream unit, PTTEP (PTT Exploration and Production Pcl) PTTE.BK, is preparing to pay $2.2 billion to acquire Cove Energy, which holds a position in huge natural gas fields discovered off the Mozambique coast. To finance the deal, it plans to raise $3.1 billion in Thailand's biggest equity sale ever.
PTT does not intend to maintain Sakari's listing status if it manages to gain at least 90 percent of the company. ($1 = 1.2497 Singapore dollars)
(Reporting by Khettiya Jittapong and Eveline Danubrata; Editing by Edwina Gibbs)