UK-based energy utility BG Group (formery British Gas) has offered to acquire Origin Energy, the second  biggest electricity and gas retailer in Australia, for $12.9 billion in cash.

BG, the biggest importer of liquefied natural gas (LNG) into the US, has offered to take over Origin Energy for $14.50 a share, a 40 per cent premium to Origin's closing share price on Tuesday.

Origin said it had not yet considered the proposal and "discussions between the parties will take place,''  adding, it "may or may not lead to an agreed transaction.''

Origin supplies gas and electricity to over three million customers – domestic and businesses - across Australia, New Zealand and the Pacific.

BG also recently set up a joint venture with Queensland Gas Company Ltd to develop an $8 billion (A$664 million) LNG project on the Queensland coast. The coal seam methane venture will produce liquefied natural gas near the port town of Gladstone.

Origin, Australia's biggest coal seam gas producer, recently raised gas production by 22 per cent in the three months ended 31 December. It is also considering further hike in production.

Origin sources more than half of its natural gas reserves from coal seam gas reserves in Queensland state, according to the company's website.

Shares in Origin surged $3.95 or 37.73 per cent to $14.42 in the morning trade. Origin ended the trading session up $3.48 for the day at $13.95.

This is the second time Origin has attracted buying interest in the past 12 months. Origin had rejected a $14 billion merger proposal by Australia's largest power retailer, AGL Energy.

The BG Group, with a market capitalisation of around $86.5 billion, operates in a number of sectors, including LNG, transmission and distribution and power across 27 countries.

BG Group plc, which is active in 27 countries on five continents, reported a 78 per cent rise in first-quarter profits at 767 million pounds ($1.52 billion), helped by a tripling in profits trading liquefied natural gas (LNG) in Asia.

Origin is is Australia's only vertically-integrated energy company with oil and gas production assets accounting for about a quarter of its revenues, which have helped offset tighter margins in its traditional retail energy business.

The proposal is, however, subject to shareholder and regulatory approvals and other terms and conditions common to transactions of this type.