Petro­fac beefs up de­fences amid threat of takeover

The Sunday Telegraph - Money & Business - - Front page - By Jil­lian Am­brose and Tom Rees

OIL ser­vices firm Petro­fac is ready­ing its de­fence against the loom­ing threat of an op­por­tunis­tic takeover as its bat­tle against cor­rup­tion allegations drags on.

City sources told The Sun­day Tele­graph that a re­freshed squad of ad­vis­ers will be un­der­tak­ing a foren­sic study of the firm’s true value as a pre-emp­tive strike against a hos­tile takeover fol­low­ing a sharp slump in its share price.

Petro­fac has been left ex­posed to the pos­si­bil­ity of an un­wel­come swoop af­ter its stock mar­ket value halved within weeks of a Se­ri­ous Fraud Of­fice probe com­menc­ing into its al­leged in­volve­ment in the Unaoil cor­rup­tion scan­dal.

The SFO is in­ves­ti­gat­ing whether the com­pany se­cured ser­vice con­tracts by pay­ing bribes to Unaoil, which it sus­pects was act­ing as a “mid­dle­man” in deals across the global in­dus­try. Both Petro­fac and Unaoil have de­nied wrong­do­ing. Ay­man As­fari, the group’s chief ex­ec­u­tive and largest share­holder, is also bat­tling per­sonal in­sider trading allegations made by the Ital­ian au­thor­i­ties. These are also allegations that he de­nies.

Even though Petro­fac has man­aged to snap up a string of lu­cra­tive con­tracts in the Mid­dle East and Rus­sia, its share price has re­mained at stub­bornly low lev­els. Sources say this makes the firm a tempt­ing tar­get. Petro­fac’s share price has crashed 51pc since the start of the year, leav­ing it with a mar­ket cap of £1.5bn.

Its po­si­tion looks more pre­car­i­ous fol­low­ing a wave of deal ac­tiv­ity in the oil ser­vices in­dus­try.

In re­cent weeks Wood Group com­pleted a £2.2bn merger with Amec Foster-wheeler, while Canada’s Sn­clavalin snapped up Uk-based WS Atkins in a £2.1bn deal over the sum­mer.

Ac­cord­ing to in­dus­try in­sid­ers Mr As­fari is com­mit­ted to turn­ing the com­pany around and is un­likely to wel­come an ap­proach. He cur­rently holds over 18pc of the com­pany, pos­ing a se­ri­ous hur­dle for buy­ers.

A spokesper­son for Petro­fac said: “Petro­fac keeps all of its ad­vi­sory re­la­tion­ships un­der reg­u­lar review as part of its or­di­nary course of busi­ness.”

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