OSLO (Thomson Financial) - Shares in Awilco Offshore ASA jumped 21 percent
in midday trade, leading up a rising overall market, after the firm confirmed it
has received an expression of interest from an unnamed third party, dealers
said.
At 12.20 pm, shares in the drilling operator were up 20.60 percent at 72
Norwegian crowns, while the OSEBX benchmark index was 0.89 percent higher at
494.36.
Earlier this morning Awilco confirmed that "a third party has expressed an
interest in acquiring the company", but did not provide any details regarding
the identity of the interest party.
"No agreement has been reached with the interest party, and Awilco has not
permitted the third party to carry out any due diligence," the firm said.
Earlier, the Oslo Bors temporarily suspended the trade of Awilco shares
after the stock jumped 16 percent, a rise that analysts attributed to the
re-emergence of Chinese takeover rumours.
Earlier this month reports emerged that Awilco is being targeted by a China
Oilfields Services Limited (COSL), the country's largest offshore exploration
supplier.
"Clearly COSL is the obvious name," one analyst said. "But I imagine there
are probably other companies interested in Awilco too... from both China and
perhaps also the U.S."
The broker added that whatever the identity of the bidder, Awilco is now
"definitely in play".
Separately, SEB Enskilda said it has hiked its recommendation on Awilco to
'buy' from 'hold', while increasing its price target to 70 crowns from 45, to
reflect improved day-rate forecasts for jack-up drilling rigs.
"Given the tighter-than-expected jack-up market and that Awilco's four
jack-ups are in a position to be awarded contracts in the next six months, we
believe the company is set for positive contract news flow," the broker said.
Additionally, SEB said, Awilco remains "one of the few potential targets"
for drillers seeking to expand their fleets through acquisitions.
alastair.reed@thomsonreuters.com
ar/hjp
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