There is no $2.2bn bid for Gulf Keystone Petroleum.
Repeat.
There is no $2.2bn bid for Gulf Keystone.
Official press release, Thursday:
The Company notes yesterday’s press speculation and can confirm that the Company, Mr Kozel, the Company’s Executive Chairman and Mr Al-Qabandi, the Company’s Business Development Director are not in discussions with Indian Oil Corporation and Oil India joint venture about a takeover of the Company.
The Company confirms that it is contemplating a placing of common shares to raise additional funds for the Company’s Kurdistan development programmes and a further announcement will be made in due course.
While we can all have a good laugh about this latest small-cap farce, it does highlight a worrying trend: the robotic republishing of random news reports by the big financial newswires without any apparent attempt to weigh the facts or place them in context.
A quick look at Gulf Keystone’s market value on Wednesday morning (around £52m) exposed this story as either patent nonsense or a Harman International style hoax, yet both Bloomberg and then Dow Jones, through their terminal services, decided to follow up on the story – repeating the key erroneous details, sending the share price soaring.
That said, it is not only the newswires that come out of this badly. Gulf Keystone and its advisers – Sarah Wharry at RBC Capital Markets, Simon Ashby-Rudd and Majid Shafiq at Tristone Capital and Martin Jackson at Citigate Dewe Rogerson, might also feel a little embarrassed.
Why did it take until Thursday morning to knock down a story that had patently created a false market in Gulf Keystone shares? The stock was up more than 30 per cent at one point on Wednesday and closed 15 per cent higher on the day.
The advisers will have known that a bid was not under discussion and that the company was actually trying to raise fresh capital instead.
For what it’s worth, we hear that Gulf Keystone is trying to raise £12m at 10p a share. It has commitments for around half that figure so far and is confident of getting the rest. And if you missed the original story that kicked off this sorry tale, here it is.
London (PTI): Indian Oil Corporation and Oil India joint venture is eyeing acquisition of London Stock Exchange-listed Gulf Keystone Petroleum Ltd for USD 2.23 billion.
Gulf Keystone Petroleum Ltd has operations in Kurdistan, Iraq and Algeria. IOC-OIL joint venture has been in talks with the promoters, including two groups based out of Kuwait, investment banking sources here said.
The two have put a value of USD 2.23 billion for acquiring the company but the promoters are asking for substantially higher price, they said. In New Delhi, IOC Chairman Sarthak Behuria declined comments on the issue while OIL Chairman and Managing Director N M Borah did not take calls.
Gulf Keystone is a Bermudian incorporated company with Gulf Keystone Petroleum LLC being the largest shareholder with 10.84 per cent. TF Kozel and AA Al-Qabandi are both shareholders in Gulf Keystone Petroleum Co LLC and IOC-OIL are believed to have been talking to them.
Talks are still on and no agreement has been reached as yet, sources said.
Related link:
Markets Live transcript discussing the non-bid for Gulf Keystone – FT Alphaville
Bloomerberg.comedy – FT Alphaville
Keystone Kops – You Tube