TROUBLED oil firm Afren’s shares rose by as much as 22 per cent yesterday as it was revealed that the company has received a takeover offer from Nigerian rival Seplat Petroleum Development.
According to Afren, Seplat has made a “highly preliminary approach”, and there can be no certainty that an offer will be made. Seplat’s shares rose by five per cent while Afren’s closed up 3.8 per cent.
Gerry Donnelly, analyst at First Energy, said the deal “makes sense from a number of perspectives”.
Mainly, he stated that “given Afren’s need to make board appointments in the near term, Seplat also presents an existing management team as well as offering a solution to Afren which needs to undertake a refinancing in the new year”.
Afren saw its shares plummet by 30 per cent in July, when it was revealed that the chief executive, Osman Shahenshah, and the chief operating officer, Shahid Ullah, had been suspended for allegedly receiving unlawful payments. Both men were subsequently sacked for misconduct.