Oil punters get burnt by Dragon
OH not again! The acrid smell of burnt fingers wafted around dealing rooms after the market heard that another prospective bidder had walked away from accident-prone Bowleven.
Shares of the Cameroon-focused oil and gas producer crashed to 84.9p on hearing that Dragon Oil was no longer exploring an offer for the company, before closing 32.25p, or 24pc lower, at 102p.
Brave punters had earlier chased the stock up to 153p on red-hot rumours of a 175p a share knockout cash bid. In your dreams!
Dealing in Bowleven shares have come with a health warning ever since the takeover saga in March 2009. The company then received a cash offer of 150p a share from an un-named concern, which was then swiftly revised downwards to £1 a share before the bidder decided to walk. No reason was given.
Yesterday, Dragon Oil, which is 51pc-owned by Emirates National Oil – a company ultimately owned by the Government of Dubai – also exited stage right and gave no reason for doing so.
Apparently, no detailed discussions were ever held with Bowleven and no due diligence information was provided by Bowleven to Dragon Oil.
It all leaves a nasty taste in the mouth, and the general consensus in the market place yesterday suggested that any punter still wheeling and dealing in Bowleven needs his or her head examined.
Cove Energy, on the other hand, was chased up to 245.25p before closing 5.75p higher at 240.5p amid reports that the overseas investment arm of Indian oil producer Oil and Natural Gas Corporation and gas distribution company GAIL India plan to bid 250p a share for the company.
Cove’s main asset is an 8.5pc stake in Rovuma Offshore Area 1 in Mozambique. Thailand’s PTT has bid 220p a share for Cove, trumping Royal Dutch Shell’s original offer of 195p a share.
Exxon Mobil takeover speculation refused to lie down, helping Kurdistan-focused explorer Gulf Keystone Petroleum soar to 376p before closing 14.75p better at 356.75p
The Footsie put on 12.36 points to 5,927.91 in anticipation of today’s European Central Bank’s Long Term Refinancing Operation (LTRO).
December’s LTRO injected liquidity and prompted a strong market rally which dealers hope will happen again, pushing the UK’S flagship index hopefully above the magical 6,000 level.
Wall Street traded 29 points higher in the early stages after US consumer confidence data jumped to a one-year high.
Platinum miner Lonmin, in which Xstrata (18.5p up at 1221.5p) still sits on 24.6pc, advanced 29p to 1105p. There are still optimistic bulls out there who think that Xstrata chief executive Mick Davis will have another pop at Lonmin if his planned merger with Glencore International ( 4.2p better at 438.35p) comes a cropper.
Electronics group Laird sparked 6.6p higher to 175.7p on hopes that Cooper Industries of the US will soon resume hostilities.
It walked away from Laird last August after failing to inspect its books following a £2 a share cash offer. Laird told Cooper at the time that if it offered 220p a share it could talk turkey.
Responding to Panmure Gordon’s suggestion that its shares are cheap and have considerable upside, Dixons Retail firmed 0.43p to 14.93p. The broker reckons Dixons can repay its 2012 bonds and grow profits by £100m over the next three years. Its target price is 28p.
Walker Greenbank rose 3.75p to 61p after launching a new in-house brand, Scion. Seymour Pierce is bullish and says the product will be competitively priced at £25 per metre for fabric and £30 a roll for wallpaper.
Craneware, which provides revenue management software to US hospitals, shot up 95p to 400p after announcing a new partnership securing the company a minimum £4.7m over the next two-and-a-half years.
Shares of Andes Energia, the Latin American energy group, surged 22.25p to a 52-week peak of 77.75p after announcing positive drilling results from its Argentinian assets together with the proposed demerger of its oil and gas and utilities divisions.
Clean technology company Acta edged up 0.5p to 5.25p after entering into a ten-year licensing agreement with Heliocentris Energy Solutions, a German company specialising in fuel cell products.
Clean Air Power, the developer of Dual-fuel technology that enables diesel engines to run on cleaner and cheaper natural gas, firmed 0.12p at 15.5p on news of a new supermarket order.
The order is for 14 Genesis Edge Dual-fuel systems to be retrofitted to existing vehicles in the fleet of a ‘major supermarket’ to reduce emissions and fuel costs. The order is worth £400,000. ÷ Five-a-side football specialist Goals Soccer Centres scored a 12p gain at 106p after it reported a 21pc rise in pre-tax profits to £9.2m and a maintained dividend of 1.85p. Four new sites were opened during the year at Sunderland, Liverpool South, Norwich and Hull. The group’s appeal against HMRC regarding the change in VAT status for block league bookings will be heard later in the year.