$60 Billion Company Vulnerable to Takeover as Stock Drops by 50% in 2 Years

[The Oil Baron]

BG Group Plc, a $60 billion company, has seen its stock value fall by half in less than two years is making it look vulnerable to a takeover as oil giants hunt for growth in new frontiers.

Exxon Mobil Corp. could be lured to BG to help fuel growth after its production dropped 7.5 percent in the third quarter.

BP Plc may be receptive to a combination with BG to challengeRoyal Dutch Shell Plc as Europe’s largest oil company.

“BG has very attractive assets,” Jane Coffey, who manages 12 billion pounds ($19 billion) as head of U.K. equities at Royal London Asset Management, said in a telephone interview. The firm owns BG shares. “There is a big danger that some opportunistic big company will come along and get the assets very cheaply.”

Over 12 years BG’s market value went from about 9.8 billion pounds to more than 53 billion pounds in 2011. That success was halted on Oct. 31 when BG said production won’t grow because of project delays in the North Sea, U.S., Brazil and Egypt. The stock fell by a record 14 percent in one day. BG then said in November it would reduce supplies of LNG to clients in Chile partly because of less fuel available from Egypt.

[Seabastian.Smith]

If such a large company has seen its stock devalue greatly, then surely with a few good performances, under the right management, it could grow again. I sense a good investing opportunity when the time presents itself, as another company looks for the takeover.