BG Group has given up on its hostile bid for Origin Energy, one of Australia’s biggest energy companies, after refusing to raise its offer price beyond $11 billion (£6.2 billion).

Shares in BG Group rose by 6 per cent, or 61p to £10.95, as investors breathed a sign of relief that the company would not overpay for its target.

BG Group bid A$15.50 per share in May but Origin has continued to insist that the business is worth far more.

Origin’s shares leapt above the offer price to a record high of A$19.99 yesterday after the Australian business announced a lucrative joint venture with ConocoPhilips.

Conoco, one of America’s largest integrated energy companies, is investing $8 billion in a joint venture that will develop Origin’s coal-bed methane reserves for export to Asia.

In a statement today, BG Group said that it would not be increasing the offer price and the bid would be allowed to lapse on September 26.

Frank Chapman, chief executive at BG Group, said: “The price implied by this newly announced joint venture is higher than BG Group is able to justify.

“We wish Origin and ConocoPhillips every success with their joint venture.”

BG, formerly the exploration arm of the former British Gas group, wanted to take control of Origin’s coal-seam gas to feed its booming liquefied natural gas business in China and South-East Asia.

Origin responded to its bid by seeking a white knight and inviting proposals on how to best exploit its reserves because it lacked the resources to do so alone.

Origin shares closed down 1.42 per cent at A$17.40 in Australia before BG Group’s announcement.

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