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Royal Dutch Shell rumoured to be interested in gatecrashing merger

Financial Times

Heritage bounces amid Genel Enerji takeover rumours

By Bryce Elder and Neil Hume

Published: July 15 2009 03:00 | Last updated: July 15 2009 03:00

Oil stocks provided the foundation yesterday for the London market to rally for a second day.

Heritage Oil was among the beneficiaries, with the Iraqi explorer bouncing from a two-month low. Since revealing plans to buy Turkish peer Genel Enerji, Heritage had dropped 27 per cent.

Takeover speculation helped yesterday’s rebound, with Royal Dutch Shell rumoured to be interested in gatecrashing the merger.

Traders saw the logic in such a move. Not only would a bid for Heritage boost Shell’s reserves, it would help it recover some ground against BP, whose consortium last month won the rights to develop Iraq’s biggest oilfield.

Heritage’s non-binding memorandum with Genel was not seen as a big hurdle for any potential acquirers. The politics of such a move, however, were more difficult to predict.

Heritage closed the day up 11.4 per cent to 482p, even after company representatives downplayed the rumour.

Other energy stocks tracked the oil price, which recovered from an eight-week low following comments from US and UK officials that economic growth would be likely to resume this year. Shell B shares rose 0.2 per cent to £14.66, BP was 0.5 per cent firmer at 473.8p and Cairn Energy took on 4.9 per cent to £21.15¼.

Tullow Oil was up 2.7 per cent to 891p even after Goodbody Stockbrokers judged recent takeover speculation to be “hot air”.


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