Mumbai: British gas utility BG Group, which made an A$13.8 billion ($13.15 billion or £6.7 billion) bid for Australia's Origin Energy, today went hostile, saying the Australian company was demanding too high a takeover offer.

BG took its all-cash offer of A$15.50 per share directly to shareholders, saying its offer fairly valued the company.

The bid represents a 48 per cent premium to Origin's closing share price of A$10.47 on 29 April, the last full day of trading before the announcement of BG Group's initial offer.

BG Group, demerged from British Gas in 1997, made the all-cash offer for Australia's biggest coal seam gas producer after Origin rejected a bid approach in May.

Origin spurned BG's offer after it doubled its estimates of gas reserves and projected a 121 per cent increase in its coal seam methane reserves.  (See: BG bids $12.9 billion for Australia's Origin Energy)  

It plans to use gas reserves in eastern Australia to feed a proposed liquefied natural gas (LNG) facility that would supply utilities in Northern Asia.

BG Group chief executive Frank Chapman said BG has no plans to raise its offer, but reserved the right to do so.

Origin advised its shareholders against any action "in relation to the offer or any documents they receive from BG at this stage."

BG, which operates in 27 countries on five continents, said the deal would give Origin the capital and expertise to develop and expand its business.

BG initially offered A$14.70 a share on 30 April, a deal to which the Origin board agreed until a rival, Santos, announced a joint venture with the Malaysian energy company, Petrona, that gave Santos $2.5 billion for a 40 per cent stake in its liquefied natural gas plant in Queensland.

Shares of Origin rose 5.8 per cent in Sydney on Tuesday, taking its gains since BG's initial approach to 57 per cent. BG's offer is also linked to 50.1 per cent acceptance by Origin shareholders.