By Karolin Schaps
LONDON, May 8 (Reuters) – Britain’s BG Group said on Friday it was happy with Shell’s $70 billion takeover bid despite a recent upturn in oil prices that led the company to increase the profit outlook for its liquefied natural gas (LNG) business.
A near 20 percent rise in crude prices since Shell made its bid for BG on April 8 has raised concerns investors may question the valuation.
“There is no change to our view on the offer,” said BG Chief Executive Helge Lund on his first results conference call since taking the reins in early February, only weeks before Shell made its takeover offer.
BG’s first-quarter results, however, also showed how deeply the drop in oil prices early this year had hit its business as it reported a 41 percent drop in core earnings to $1.6 billion from $2.7 billion the same time last year.
The company’s revenue and other income fell 21 percent year on year to $4 billion, despite a doubling in output from its Australian and Brazilian operations and shipping 21 more LNG cargoes than in the previous year.
The gas producer, Britain’s third-largest energy company, raised the earnings forecast for its LNG unit to $1.3-1.5 billion based on a brighter outlook for future LNG prices.
Lund, an oil industry veteran who gained praise from his success at Norway’s Statoil, said he welcomed the Shell deal with “mixed emotions” as a takeover had not been part of his plan when he took the BG top job.
He is expected to leave the company once the takeover completes but said on Friday he had not yet spent any time thinking about what he would do next.
BG shares were up 0.5 percent by 0741 GMT.
(Reporting by Karolin Schaps; editing by David Clarke and Jane Merriman)
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