* Thailand's PTT gets only 0.25 pct acceptances by first close
* Extends offer for Cove to July 6
By Sarah Young
LONDON, June 25 (Reuters) - Shareholders are betting Shell will up the stakes in a bid battle for explorer Cove Energy after Thailand's PTT Exploration and Production extended the deadline for investors to accept its $1.9 billion offer.
Cove shares were up 0.3 percent to 265.5 pence at 1421 GMT on Monday, still above the 240 pence per share PTT has offered, as investors eyed a potentially higher bid from Shell.
PTT said on Monday that investors would now have until July 6 to accept its offer, after it won acceptances from only 0.25 percent of Cove shares by last Friday's deadline.
The low take-up can be attributed to Cove shares trading above the offer price, as they have tended to do since the Thai bid on May 23.
Cove has discovered more gas since both suitors launched their offers.
"The recent discovery increases the value of the business to 300 pence. We think there is a possibility that Shell is coming back," Anne-Sophie D'Andlau, co-founder of Paris-based hedge fund firm CIAM and a minority shareholder in Cove, told Reuters.
Shell and state-owned PTT have been vying for Cove since February, lured by the British explorer's 8.5 percent stake in a huge gas field discovered off the coast of Mozambique in a block known as Area 1.
Another minority shareholder who declined to be named said he would wait to tender his shares.
"We have yet to see the final hand of both interested parties. Can both bidders afford to pay more? Yes, they can," he said.
East Africa is set to become one of the world's largest gas exporters. supplying energy-hungry Asia with liquefied natural gas (LNG) from a string of major discoveries across Mozambique and Tanzania.
As one of the world's biggest LNG players, Shell wants a slice of the action.
"I don't think the PTT bid was sufficient to make Shell walk away. I am in the camp that expects another move from Shell," Bernstein analyst Oswald Clint said.
But some analysts cautioned that Shell's strategy of building a large position in East Africa may deter it from paying more for Cove.
"We believe Shell's end-game in Mozambique does not stop with only an 8.5 percent working interest in Area 1 through its acquisition of Cove," Jefferies analysts said in a note.
"As such, continuing to bid up Cove could make acquiring additional interests more expensive. Shell may believe it is in its best interest to walk away from Cove."
Shell's 220-pence-per-share offer remains on the table until Wednesday, after it also extended a deadline for acceptances.
The bidding war for Cove appeared to be a two-horse race after an Indian consortium said on Monday it was no longer considering making an offer.