Shares in North Sea oil firm Ithaca Energy jumped through the £2 mark yesterday after it revealed it had received unsolicited interest in the business from a number of third parties.
Ithaca, registered in Canada and with its headquarters in Aberdeen, said on January 23 it had received a takeover proposal from an unnamed firm.
It added then that discussions were at a preliminary stage and that there was no certainty that the approach would lead to an offer being made.
In yesterday’s announcement, the business said: “The board of Ithaca believes that it is in shareholders’ best interests that the company enters into discussions with all bona fide interested parties with a view to maximising shareholder value.
“The board wishes to stress that discussions with all parties are at a preliminary stage and there can be no certainty of an offer being made for the company. The company does not intend to provide further updates unless an offer is made.”
Ithaca has assets in the inner and outer Moray Firth plus central and southern North Sea. It said last month it remained focused on first oil on its North Sea Athena development, due to double its production to 10,000 barrels of oil equivalent per day.
Alan MacPhee, an investment manager at Brewin Dolphin in Aberdeen, said: “Just five weeks after the initial announcement that Ithaca had received a takeover approach, this announcement that several more parties have come forward with a view to making a potential offer will certainly come as a welcome boost for Ithaca shareholders and indeed for the North Sea.
“This further cements our view that merger and acquisition activity in the oil and gas sector is likely to remain a feature of markets for the rest of 2012, and perhaps beyond, as cash-rich institutions look to get their money working harder for them.
“Given that there appears to be several interested parties, the board have quite rightly noted that they will enter discussions with the interested parties with a view to maximising shareholder value.
“Given the quality of Ithaca’s asset base and the future potential from projects such as Athena, any interested party will have to pay a serious premium to gain board approval; hence the share price reaction.
“The shares were up 14% to 198.375p at the close, valuing the business at around £514million.”
The previous 52-week high for the shares was 196p, with a low in that period of 40.4p.
There has been speculation that potential buyers for Ithaca could include EnQuest, Taqa and Dana Petroleum.
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