Battered Petroceltic shares jump as Worldview mulls bid
Published 23/01/2016 | 02:30
Shares in struggling Irish oil and gas explorer Petroceltic virtually doubled in value at one point yesterday after its largest shareholder, Worldview Capital Management, said it is mulling an all-cash offer for the company.
Swiss hedge fund Worldview said yesterday that it is in the process of "evaluating and preparing for a possible all cash offer" for the shares in Petroceltic it doesn't already own. Worldview is the largest shareholder in the explorer with a 29.6pc share.
Petroceltic's stock soared on the back of the announcement, shooting up from a low of almost 11 pence to just over 24 pence by mid-afternoon on London's junior AIM exchange.
Its shares fell back during the day but still closed well up at 17 pence.
Worldview cautioned that its evaluation of Petroceltic is "ongoing" and added: "There can be no certainty at this stage that any offer for Petroceltic will ultimately be made, nor as to the terms of any such offer should one be forthcoming."
In December the Dublin-based firm announced a strategic review of its operations, effectively putting itself up for sale.
It said in a trading update that it had breached agreements relating to its debt pile.
The company has debts of $217.8m (€200m) and cash balances of $28.1m, although most of this cannot be readily accessed as it is held in local currencies. The company's lenders recently agreed to extend a temporary waiver that allows Petroceltic to continue to breach the terms of its loans.
Although it is uncertain how much exactly Worldview may have to pay if it were to make a formal offer, it would likely be a fraction of Petroceltic's value a little over a year ago.