LONDON: British oil company Heritage Oil agreed a £924m ($1.6bn) takeover offer from a Qatari fund, Al Mirqab Capital.
Heritage, whose main oil production is in Nigeria, said yesterday it was recommending a 320 pence per share cash offer, which represented a 25 percent premium to its closing price the day before the approach was announced.
Heritage’s largest shareholder, former mercenary Anthony Buckingham who owns 34 percent of the FTSE 250 company, has entered into an agreement with Al Mirqab to retain a 20 percent stake of Heritage for five years under its new ownership.
Over the last month, the oil sector has seen signs that deal activity is picking up. Mining company Glencore Xstrata said it agreed to buy Chad-focused oil firm Caracal Energy for about £800m.
Shares in Heritage, which before opening yesterday had risen about 50 percent over the previous 12 months, were up 22 percent to 312.4 pence at 0756 GMT. Analysts said the deal was positive for the exploration and production sector. Afren, whose main operations are also in Nigeria, traded up 3.5 percent, while Ophir was 4 percent higher.
“It’s a welcome shot in the arm in terms of valuations. There is a theme. Companies which are oil and are relatively simpler operations, that is, they’re onshore rather than offshore, they are appealing to people,” Royal Bank of Canada analyst Al Stanton said.
Al Mirqab is interested in accessing Heritage’s growing oil output in Nigeria and its exploration portfolio which includes areas in Tanzania and Papua New Guinea. Jersey-based Heritage bought into a Nigerian oilfield which had been owned by oil major Shell in a $850m deal in 2012 while it sold out of a gas field it had discovered in Kurdistan. It had previously sold oil fields it had found in Uganda.
Heritage was founded by Buckingham, a former North Sea diver who went on to provide mercenary fighters in Africa when he was a partner in the military contracting firm Executive Outcomes.
Still subject to shareholder approval, Heritage’s takeover has been recommended by a board which excludes Buckingham.
Reuters
