Monday 22 December 2014

It's cheeky bid time

The boys over at FT Alphaville might have knocked off until the New Year but don't worry, little old Betaville will keep on going until 2015.

First, let's address this rather cheeky bid from for Afren from Seplat, which I have to admit I had never heard of until this morning.

Afren said today that after seeing its share price rise significantly on Friday, it had received:

"a highly preliminary approach from SEPLAT Petroleum Development Company plc ("Seplat") regarding a possible combination with Afren." 

Here is the link the RNS statement:

However, a quick glance at the market capitalisations of both companies would lead you to assume that Nigerian oil explorer Seplat is being rather opportunistic given Afren's recent "management issues". Afren's current market capitalisation is £550m while Seplat is worth about £670m.

Anyway, I understand this is not the only M&A deal Afren has been presented with, so I would expect to see more interesting developments over the next few weeks with regards to this situation.

And this end-of-year deal flurry raises some interesting questions about the prospects for mergers & acquisitions next year in the UK. Indeed, in the last seven days there have been three significant public market deals in Britain - Afren, Catlin and British Airway's bid for Aer Lingus.

All of these approaches have an air of cheekiness about them but some market commentators are starting to speculate they could herald the beginning of something big for 2015: a genuine M&A boom.

Well, Bloomberg at least has "gone early" by publishing today its top M&A deal predictions for 2015. Here is a link to Bloomie's prediction list:   

Do, though, keep an eye on Betaville towards the end of the year as I am hoping to compile my very own deal prediction tips list...

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