x Abu Dhabi, UAETuesday 25 July 2017

Heritage Oil up after report it rejected a £1.2bn takeover

Heritage Oil shares rise on rumoured takeover bid.

Shares of Heritage Oil, a Canadian company with a big gas discovery in Iraqi Kurdistan, have risen sharply on reports that the company rejected a £1.2 billion (Dh7.11bn) takeover offer as too low.

The stock rose by as much as 11 per cent yesterday on the London Stock Exchange to a seven-week high of 321.3 pence after closing on Wednesday at 289.7 pence.

Heritage officials yesterday declined to comment on the stock movement or a Financial Times report that an unidentified company based in Abu Dhabi had made an unsolicited offer of 425 pence per share for the oil and gas company.

In January, Heritage shares fell sharply after the company announced that a suspected oil discovery in Kurdistan had turned out to be gas. Paul Atherton, the chief financial officer, said the company might export gas to Europe through a pipeline planned to run to Turkey.

However, that plan hinges on Baghdad and the regional government of Kurdistan resolving a long-running dispute over oil and gas jurisdiction that has blocked most Kurdish exports. Recent progress towards an accord has stalled as Iraq's coalition government, headed by Nouri al Maliki, the prime minister, struggles to retain power amid heightened national and regional unrest.

A spokesman for Mubadala Development, a strategic development company owned by the Abu Dhabi Government, denied yesterday that its oil and gas unit had made an offer for Heritage.

An informed source said Abu Dhabi National Energy Company, or Taqa, was unlikely to bid for a company with which it had no operational overlap.

International Petroleum Investment Company, the third of the trio of government-controlled Abu Dhabi companies charged with investing in oil and gas assets overseas, did not respond to e-mailed questions yesterday. That company focuses on petroleum refining and petrochemicals and has just completed financing for a €4bn (Dh20.58bn) European acquisition.

Other possible Abu Dhabi bidders include private-equity groups.