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Gasol shares rise despite Côte d'Ivoire disappointment

Last updated: 08:29 19 Feb 2014 EST, First published: 09:29 19 Feb 2014 EST

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Gasol (LON:GAS) shares were up 11% in early deals despite the disappointing news that a major acquisition would not go ahead.

The proposed acquisition of the Energie de Côte d'Ivoire business from GDF SUEZ will not go ahead, because pre-emption rights have been taken up.

Basically, that means third parties had the right to choose to buy the asset ahead of any agreed sale, and in this case that option was taken up.

The proposed reverse takeover was worth US$116mln, and would’ve been partially funded by a US$76mln debt deal with Deutsche Bank.

Gasol, which currently has a stock market value of £6mln, is to receive US$2mln in break fees as a result of the pre-emption and will also get back the US$2mln deposit it paid when it agreed the first deal.

Chief operating officer Alan Buxton said the company will continue to pursue its strategy and will still evaluate opportunities in West Africa, and the Cote d'Ivoire in particular.

"We are obviously disappointed to have been pre-empted on this acquisition but nonetheless feel encouraged that in pursuit of our strategy to develop gas markets in West Africa we were able to identify, assess and bid successfully on what is clearly an attractive asset,” Buxton said in a stock market statement.

“We secured financing in a difficult market and ultimately the fact that all existing partners pre-empted demonstrated we had clearly identified a good transaction.”

On AIM, Gasol shares were up 1.88p or 11.03% trading at 18.88p each.

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