UK Edition
Market report: US oilfield services giants circle vulnerable Petrofac
US oilfield services giants Schlumberger and Halliburton are understood to be among the firms circling scandal-hit Petrofac and are bolstering their attack teams to capitalise on the FTSE 250 firm’s vulnerable share price.
Just days after The Sunday Telegraph revealed that Petrofac has beefed up its defences in preparation of a takeover siege from some of the biggest names in the oilfield services industry, City sources have confirmed that the two US firms and an undisclosed Middle Eastern bidder have parachuted in advisors to look at an opportunistic bid for the company.
Petrofac has been left vulnerable to a swoop after its share price fell by half following a Serious Fraud Office probe into the firm’s alleged involvement in the Unaoil corruption scandal.
The Daily Telegraph understands that no party is ready to pull the trigger imminently but City chatter has suggested a bid of around 600p per share is being considered by the interested bidders.
That would represent a hefty premium on its current 406.9p share price but a bargain compared to the 946p-per-share valuation it peaked at earlier this year before the SFO investigation.
It is thought that top shareholder and chief executive Ayman Asfari will be resistant to a takeover but a spate of consolidation deals in the oil services sector - including Wood Group’s merger with Amec Foster Wheeler - has upped the pressure on firms languishing with lowly valuations.
Meanwhile, the sour mood on stock markets created by a concoction of sinking commodity prices, stumbling US tax reforms and concerns over frothy valuations lifted; Europe’s major stock indices rebounding firmly into positive territory.
The FTSE 100, which outperformed the rest of Europe in the five-day slide, lagged behind. It was held back by engineer GKN’s 4.8pc plunge and falls in valued of oil giants BP and Royal Dutch Shell’s. The UK’s blue-chip index closed only 14.33 points higher at 7386.94.
Elsewhere, Close Brothers jumped 70p to £13.86 after reporting a rise in its loan book while bus and train operator FirstGroup climbed 2.2p to 103.2p on ratings upgrades by Deutsche Bank and RBC Capital Markets.
On the junior Aim market, rare earth elements producer Mkango Resources soared 6.3p to 10.1p after troubled commodities giant Noble Group injected £12m into the Aim-listed company’s project in Malawi through its Talaxis subsidiary.
Small-cap oil producer Regal Petroleum plunged 1.5p to 5.8p after it confirmed that its offices in Ukraine were raided by local tax authorities and that one of the company’s subsidiaries has had its VAT registration suspended.
Additional reporting by Jillian Ambrose