Exxon to Pounce on Gulf Keystone?

ExxonMobil is reportedly considering an $11 billion takeover of Kurdistan-focused explorer Gulf Keystone Petroleum.

Reuters, citing the Independent on Sunday newspaper, said that Exxon is considering making an estimated 800 pence per share bid for the British company, which has made huge oil finds Iraqi Kurdistan.

Neither company could be reached for comment by Reuters on Sunday.

Exxon has “sounded out” Gulf Keystone about the possible deal, said the report without citing its sources, adding that it is thought that the company would not accept an offer at the 800 pence per share level.

Shares in Gulf Keystone closed at 165.5 pence on Friday, valuing the firm at 1.4 billion pounds.

(Source: Reuters)

2 Responses to Exxon to Pounce on Gulf Keystone?

  1. Ali December 19, 2011 at 4:03 pm #

    How can it be an $11bn takeover if the firm is only valued at £1.4bn?

  2. Editor December 19, 2011 at 4:31 pm #

    @Ali: thanks for your question.

    At Friday’s closing price of 165.5p, it has a value of ~£1.4bn (~$2.2b).

    If, as the report suggests, Exxon were to offer 800p/share, roughly 5x the current price, then the takeover would be worth about $11bn.

    Hope this helps.