Australia's Arrow Energy is expected to reject a $AU3.3 billion ($NZ4.3 million) joint bid from Royal Dutch Shell and PetroChina, according to sources.
A steady stream of voices suggesting the offer is too low has fed speculation Arrow will turn down the bid this week, the Australian Financial Review reports.
On March 9, Royal Dutch Shell and PetroChina offered $AU4.45 in cash for each Arrow share, plus a share in a new Arrow entity, in a first foray from a Chinese company in Australia's burgeoning coal-seam gas sector.
Arrow's board recommended shareholders take no action on the offer, which is non-binding and conditional, and appointed Citi and UBS as financial advisers to evaluate the deal.
"PetroChina will be pretty keen to get their hands on this asset and lock in that production," says Rob Groenendal from Craigs Investment Partners.
"We probably haven't seen the last of this yet but it's more than likely the offer will be formally declined at this stage."
