BHP Billiton (ASX: BHP) will acquire US shale gas company Petrohawk for US$38.75 per share through an all-cash tender offer for all of the issued and outstanding shares of Petrohawk, representing a total equity value of approximately US$12.1 billion and a total enterprise value of approximately US$15.1 billion, including the assumption of net debt. The Petrohawk board of directors has unanimously recommended to
Petrohawk shareholders that they accept the offer.

The deal would provide BHP Billiton with operated positions in the three world class resource plays of the Eagle Ford and Haynesville shales, and the Permian Basin. Petrohawk’s assets cover approximately 1,000,000 net acres in Texas and Louisiana, with estimated 2011 net production of approximately 950 million cubic feet equivalent per day, or 158 thousand barrels of oil equivalent per day.

BHP Billiton CEO, Marius Kloppers, said the acquisition was a natural fit with BHP Billiton’s strategy.

“The proposed acquisition of Petrohawk is consistent with our well defined, upstream, Tier 1 strategy and provides us with even greater exposure to the world’s largest energy market, while also broadening our geographic and customer spread.

The tender offer is expected to commence by 25 July 2011.

The deal has left analysts concerned BHP is overpaying. As a result, the mining giant slumped 1.7 per cent at $42.88 by 1:03pm (AEST), leading the share market lower.