Tug of war for Cove delights shareholders
THE gold rush for investors in Cove Energy stepped up a gear yesterday after another bid was made for the Irish-led company.
Thailand's PTT made a bid of 240p a share for the UK-listed Cove, which values the company at about €1.5bn. That topped the previous offer from Shell, which had been recommended to shareholders by the board.
Traders are now expecting Shell to come back with a new bid to beat PTT and shares in the company jumped another 12pc to 250p. The stock has more than doubled this year.
"The market is suggesting there's going to be another counter from Shell," said Werner Riding, an analyst at Peel Hunt in London. He added: "It's clear that the Mozambique government prefers Shell."
Cove said in January that it would explore a possible sale of the company and it has attracted huge interest since then. Its main asset is a share in a massive gas field in Mozambique.
The eventual sale of the business willprovide a huge windfall for Cove's leadership, which includes a number of Irishmen, such as the chief executive John Craven. A group of investors put together by Dolmen Stockbrokers will also walk away with huge gains once Cove is finally bought.