BG Group, the exploration arm of the old British Gas, today went hostile with its near-£7 billion takeover bid for Australia's Origin Energy.

Having been rejected by Origin's board with its A$13.8 billion bid, it is now taking it directly to its target's shareholders.

BG sees Origin as a valuable part of its strategy to expand in supplying liquefied natural gas (LNG) into Asia. LNG is a major growth product for the region as it can be transported by ship, rather than having to be delivered through pipelines, and be sourced from stable countries like Australia.

BG is to offer $15.50 cash for each Origin share - an identical price to the one it previously proposed to the board.

"Origin has a good retail, power generation and exploration and production business," BG chief executive Frank Chapman said.

Origin's board will inevitably now push to persuade its shareholders that BG is trying to buy it on the cheap.

They cite the valuation placed on a Queensland LNG plant in a deal between local oil producer Santos and Malaysia's Petronas, claiming that A$2.6 billion partnership suggested Origin's assets were worth more than BG claimed.

BG, in response, says Origin may have overvalued its coal-seam gas reserves.

"Recent transactions, analysed on a comparable basis, confirm that BG Group's offer provides full value to Origin's shareholders," Chapman said.

Chapman's team pointed out that the offer price represents a 48% cash premium on Origin's closing price of A$10.47 on 29 April just before it announced its first offer.

Australian analysts today said the approach direct to investors could pay off for the British firm.

"Some Origin shareholders would be thinking long and hard about accepting this," said Gavin Wendt, resources analyst at fund manager Fat Prophets in Sydney. He raised the prospect that BG may put forward a higher offer.

Origin is Australia's largest coalseam gas producer. After rejecting BG's bid, it said it would focus on how to get the best value from its reserves, possibly through partnerships to supply an LNG plant or even through a break-up of the company, which also has power generation and retail businesses.