Shell agrees £1.1bn cash offer for Cove Royal Dutch Shell unveiled a £1.12bn recommended cash bid for Cove Energy on Tuesday after agreeing to increase its initial valuation of the Aim-listed energy group to 220p a share in the face of competing takeover interest from Asia. PTT responded by issuing a statement that said it was considering its options and would make a further announcement when appropriate. Cove shares rose 4 per cent to 225.75p in early trading, while Shell's London-listed B shares rose 0.5 per cent at £21.895. Shell's formal offer for Cove valued the target's equity at £1.12bn. However, PTT Exploration had dangled the same sum in front of Cove in a proposed 220p-a-share counter-offer announced two days after Shell's approach was publicised. Cove vaulted to prominence after taking an 8.5 per cent stake in a licence to drill off the coast of Mozambique in 2009 as a junior partner to Anadarko Petroleum of the US. This area, known as the Rovuma offshore basin, turned out to hold large natural gas reserves and has helped to spur broader industry interest in exploration in east Africa. Buying Cove would take Shell into Mozambique for the first time, while also marking its entry into Kenya, where Cove also has offshore interests. The 220p-a-share Shell bid represents a premium of 96 per cent to the closing price on January 4, the day before Cove said it was putting itself up for sale. The deal requires the consent of the government of Mozambique, whose decision to levy a capital gains tax on the Cove sale had temporarily led to uncertainty in the auction process. Michael Blaha, Cove's executive chairman, said: "I am confident, following our discussions with the government of Mozambique, that timely consent for Shell's offer will be forthcoming." Cove has agreed to pay Shell a break fee of £11.1m if it is sold to a rival bidder.