An apparent low-ball takeover offer from Petroceltic’s (LON:PCI) largest shareholder sparked extreme volatility in the oil and gas junior’s shares on Friday.
The £6.4mln, or 3p per share, takeover offer is a far cry from the $500mln that was previously on the table when Dragon Oil thought about buying the company nearly eighteen months ago.
Offering 83% below Thursday’s closing price, clearly, the offer is way below market expectations and it has already been dismissed by one City analyst as ‘deeply insulting’.
Nevertheless, Petroceltic and its shareholders face very real uncertainties given it owes around $218mln and is currently avoiding default only due to the leniency of its lenders – which on Monday waived due payments until at least March 4.
Worldview, the activist shareholder behind the £6.4mln offer, which already owns 29% of the company, said it believed the value of Petroceltic’s equity is ‘close to zero’ due to the “parlous financial position of the company.
The activist shareholder has been in dispute with Petroceltic’s management team for more than a year, and has previously failed in attempts to sack the board.
Elsewhere there were a number of other big small-cap moves.
Australian mining minnow Thor Mining (LON:THR) shot up by about a third after confirming it had trousered A$2mln as part-payment for its previously agreed A$3mln sale of the Spring Hill gold project.
Shares in Patagonia Gold (LON:PGD), another mining junior, were boosted by about 20% as the company unveiled plans for an initial open pit mine in Argentina; the project will have a two-year life before it transitions into two separate underground projects.
Meanwhile, Africa focussed coal-bed-methane group Tlou Energy (LON:TLOU) gained almost 25% as it started production tests from a pilot well in Botswana.
Earlier in the week, the Horse Hill or ‘Gatwick gusher’ oil project was back in the news as Regency Mines (LON:RGM) bought back into a 5% stake in the project following last week’s breakthrough well test results - it previously sold out last year.