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LONDON (Alliance News) - Cadogan Petroleum PLC late Thursday said it will no longer be making an offer for fellow London-listed firm Ascent Resources PLC because the company's share price has risen too much.
Cadogan made a preliminary approach to potentially combine the company with Ascent earlier this week, and had until April 21 to make a firm offer or walk away.
However, Cadogan said Thursday that Ascent's current share price is around 6.5 times higher than the share price before it made its preliminary approach.
Ascent Resources shares closed at only 0.93 pence per share on March 23, the last trading day before Cadogan made its approach, and closed down 12% on Thursday to 6.20 pence per share.
As a result, Ascent's market capitalisation has risen too far and Cadogan does not believe pursuing the deal is worthwhile any longer.
"As a result, Cadogan confirms that it does not intend to make an offer for Ascent," said the company on Thursday.
Although it has made its intention clear, Cadogan still has the right to make an offer for Ascent within the next six months.
Cadogan shares closed down 5.9% to 10.0 pence per share on Thursday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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