The Oil Man: Gulf Keystone/DNO

It has just been announced that DNO has made a cash and shares bid for GKP worth around $300 million (£228 million). The bid is hostile and has been presented to the GKP board without indications of any formal discussions.

Obviously, with only the DNO statement to work with, investors should sit tight - at least until GKP wake up and make a comment.

The announcement suggests that the cash element will ensure that bondholders get out a a premium to par which is not on offer under the current restructuring and that the equity element enables shareholders to remain exposed to Shaikan under DNO ownership; I hope that the last statement was written rather tongue-in-cheek…

As one would expect, the usual business school lingo is deployed all over the announcement viz "unlocking of operational synergies" and the deal will "create further scale" which are undoubtedly true, but will probably not read well at GKP HQ this morning, as one must presume that in the last two years of trying to find a partner, DNO must have been at the top of the list.

More later when GKP and its advisors have a comment.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.