July 16, 2012 / 6:48 AM / 5 years ago

UPDATE 2-Clock ticking for Shell in battle for Cove Energy

By Kate Holton and Sarah Young

LONDON, July 16 (Reuters) - Thai oil firm PTT Exploration & Production has again extended its offer for gas explorer Cove Energy Plc, putting the ball back in the court of rival suitor Shell which must decide imminently whether to up its bid.

PTT's third extension of the deadline for investors to accept its $1.9 billion offer comes as investors wait to see how Shell, currently the underbidder with a $1.8 billion bid, will respond in the battle for Cove's huge east African gas finds.

The two companies could be heading into the first formal takeover auction for a listed British company since 2008 after a five-month bidding war.

Britain's takeover watchdog ruled on Friday that if neither suitor declared its current offer final before 1600 GMT on Monday, an auction would start the next day, which could involve them submitting bids to daily deadlines until a winner is found.

If Shell and PTT don't submit revised offers on Tuesday, their current bids will be regarded as final and there will be no auction, leaving PTT in pole position given its higher offer.

PTT said the offer had been extended and would remain open until July 25, the same day Shell's current offer expires. So far Cove has won acceptances from only 0.25 percent of Cove shares.

The two companies have been battling to buy Cove since February, attracted by the company's position in huge gas fields discovered off the coast of Mozambique which look set to transform the east African country into a major supplier of energy to Asia.

Shares in Cove, which have consistently traded above PTT's offer of 240 pence per share on market bets that Shell will return with a higher offer, were up 0.8 percent to 277.5 pence at 0725 GMT, valuing the company at about 1.35 billion pounds($2.1 billion).

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