DNO/Gulf Keystone Petroleum
It has just been announced that DNO has made a cash and shares bid for GKP worth around $300m. 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 their advisors have a comment.
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