May 9 (Bloomberg) -- BG Group Plc, the third-biggest U.K. natural gas company, said talks with Origin Energy Ltd. over its A$12.9 billion ($12.1 billion) takeover bid for the Australian company continue and are currently ``inconclusive.''

Discussions have been held between senior representatives of the companies over the proposal and a further announcement will be made by BG ``at the earliest practicable date,'' BG said in a statement to the Australian stock exchange today.

BG on April 30 offered to buy Sydney-based Origin, Australia's third-biggest power and gas retailer, for A$14.70 a share in cash. The U.K. gas producer will gain access to gas fields as it seeks more opportunities to supply liquefied natural gas to Asia.

Origin rose as much as 2.5 percent to a record A$14.61 in Sydney trading. The stock has advanced 59 percent since the Reading, England-based gas producer made its bid.

The offer, while 40 percent more than Origin's last closing price before it was made, represents valuation multiples that are ``not at all challenging,'' Origin Managing Director Grant King said May 7.

The bid was made on the basis that it would be implemented ``cooperatively and expeditiously by way of a scheme of arrangement,'' BG said today.

Shareholder Approval

The proposal will likely require the approval of BG shareholders, and the intention is to secure this before Origin investors vote on the offer, the U.K. company said. Since making the bid, BG has received commitments from banks that had agreed in-principle funding for the transaction, it said.

Today's announcement was in response to an Australian Securities and Investments Commission request for further information on the bid, BG said.

Origin is Australia's largest producer of gas from coal seams and holds the biggest volume of proven and probable reserves of the fuel, totaling about 2,470 petajoules (2.3 billion cubic feet) in July 2007. The company may add about 1,000 petajoules of coal seam gas reserves by June 30 this year, double the volume originally expected, King said this week.

The size of Origin's coal seam gas resources is being boosted by rising natural gas prices, King said. Gas prices will probably rise further because of the introduction of a price on carbon and an expected link between the eastern Australian gas market and international market through exports of the fuel as liquefied natural gas, it said.

Prices for LNG paid by utilities in Japan, the world's biggest importer of the fuel, have reached almost double the U.S. benchmark, consultant Facts Inc. said.