£600m takeover talk sends Bowleven shares spinning up

By PERRY GOURLEY
Published on 18/02/2012 00:00

MORE than £130 million was added to the value of Edinburgh-based oil explorer Bowleven yesterday ahead of a possible £600 million takeover offer for the company.

City speculation that the Scottish firm was being stalked saw heavy trading in Bowleven’s shares before Dragon Oil issued a statement confirming it was exploring an offer. Tullow Oil, another UK-listed oil firm, had been rumoured to be lining up a bid for Bowleven before Dragon made its announcement.

Dragon, which is 52 per cent owned by Dubai’s Emirates National Oil Company, is known to be keen on widening its current focus on Turkmenistan and has built up a war chest for acquisitions on the back of increased production and a higher oil price.

Bowleven, headed by chief executive Kevin Hart, has made a series of oil discoveries off the coast of Cameroon, although none have so far been developed.

The company’s main interests are the MHLP-7 oil field, where a development plan is in place, and the Sapele oil fields where progress is less advanced.

Analysts believe an offer for Bowleven could reach over 200p ,with Steven Asfour at Fox-Davies pointing out that the shares had fallen a long way from the 414p high seen last year. “One important note to remember here is that a number of large institutions backed the company during a recent fund raise at 103p, and I am sure they would want a substantial premium before giving up shares they have stayed loyal to,” he said.

Bowleven’s largest shareholders include Blackrock, F&C Asset Management and JP Morgan Asset Management. Its directors are also significant shareholders, with Hart owning 2.56 million shares – worth more than £3m at yesterday’s closing price.