Shares in Gulf Keystone Petroleum (JKP) jumped on Monday following yesterday’s report that U.S. oil major ExxonMobil was considering a takeover bid at five times the company’s closing share price on Friday.
The shares were up as much as 34% in early trading on Monday, but had given up half those gains by mid-afternoon.
Reuters reports that a source close to the situation downplayed the story, noting bidders rarely make offers at more than a 50 percent premium to targets’ pre-bid share price.
Analysts dismissed the prospect of such a high bid from the financially disciplined Texas-based oil giant, which made headlines with its recent entry into the semi-autonomous Kurdish region of Iraq.
“We fear an element of yuletide wishful thinking may also be playing a part,” Richard Savage, oil analyst at brokerage Mirabaud told Reuters.
One dealer said they were especially surprised by the report’s claim that Gulf Keystone’s board would not accept the estimated 800 pence/share bid that Exxon was considering and instead the Chief Executive, Todd Kozel, wanted a price tag over 10 billion pounds in total.
Gulf Keystone said in September it was seeking a buyer for its 20 percent interest in the Akri-Bijeel block in Kurdistan in order to help finance ongoing development of other assets.
(Sources: Reuters, Yahoo)
(Photo: Shaikan 2 rig site, March 2011)