More detail on the BLVN takeover rumours that began with the FT late yesterday.
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BowLeven Advances Most in Three Months on Takeover Speculation
By Eduard Gismatullin
July 6 (Bloomberg) — BowLeven Plc, the U.K.-based oil explorer focusing on Cameroon, jumped the most in three months in London trading on speculation it may get a takeover offer.
BowLeven soared as much as 19 percent, the biggest gain since March 26, and traded up 16 percent at 68 pence as of 9:30 a.m. local time.
“There are rumors it could be a bid coming in,” Andrew Matharu, an analyst at Westhouse Securities Ltd., said after the Financial Times reported yesterday that BowLeven was subject to renewed takeover speculation. Its assets include the Etinde permit in Cameroon, where it raised resource estimates in March.
BowLeven has tumbled almost 50 percent since Feb. 28, when Dragon Oil Plc said it was no longer studying an offer for the Edinburgh-based company. The FTSE AIM All-Share Index, of which BowLeven is a member, has dropped 16 percent in the period.
“Equity prices have been depressed while the oil price is relatively high,” Matharu said today by telephone.
No one at BowLeven was immediately available for comment
Hub, I noted your comment on BLVN coming off a recent low of 57p, compared to the last pre rise price of 74p, which suggests theres more to come based on ‘speculation’ of a predator and obviously a lot more should this prove true. I noticed a broker note recently pricing BLVN at 70p based on the difficulty of monetising their assets. However I believe that BLVN have P50 contingent resource of 217 mmboe (net) which based on their Mkt cap of £209m makes them a much better proposition than many similar O&EP companies with a share price closer to £4.00 a realistic possibility and discounting prospective resource inventory. Obviously it depends on the price bbl, but how much does a predator discount for the cap ex involved in getting the oil and gas to market. OIP and figures are bandied around on BB explorer sites but if you’re buying there’s a cost to bring the oil to market that sometimes gets dismissed or is this all rapped up in price per barrel? I’m no expert so would welcome some enlightenment. Thanks. Mark
here we go in the takeover merry go round again. lets just hope its not the usual pump and dump. However more then likely it is, and I will be derisking along the way. Hopes for £2 long gone, id settle for 120p !!.cant ne greedy thas they say.
buynhold,
it’s important to remember this is a rumour whereas the dragon approach was confirmed pretty swiftly. The sp rose to test 150p if I recall but the platform before the rise was nearer to the 75p mark. Today, BLVN has moved off a much lower base at 59p range. Hence the move to test 73p and currently at 68p suggests that the market is not overly convinced at present.
But regardless of the rumours, the drop from 70p to 55p recently has looked overdone and is more about the traders market and hedge funds games than anything else. It’s always nice to see these games broken up from time to time. Whether they dare repeat the dip to 55p is entirely up to them but with QE3 on the way (imho) risk on assets should look attractive again.