(Sharecast News) - Hurricane Energy said on Wednesday that it has decided to launch a formal sale process after receiving an unsolicited offer of 7.7p per share in cash.
The AIM-listed oil exploration and production company said the offer is at a premium of "only" 13% to the mid-market closing price on Tuesday and the directors have decided it should not be recommended to shareholders. However, its largest shareholder, Crystal Amber Fund Limited - which owns a 28.9% stake in the group - had indicated its support for the offer.
Hurricane said it is in a "very strong" financial and operational position and that it has decided to launch a formal sale process (FSP) to establish whether there is a bidder prepared to offer a value the board considers attractive.
"Whilst the outcome of the FSP is uncertain, the board is confident of the ongoing strength of the company's business in both financial and operational terms," it said.
Chairman Philip Wolfe said: "The board intends to deliver near term shareholder returns through either the successful outcome of the formal sale process or with a substantial capital return programme.
"Hurricane is in a strong position with an experienced senior team, robust balance sheet, profitable ongoing production and significant tax losses - a platform capable of supporting distributions throughout Lancaster's expected economically productive life. We look forward to updating shareholders in due course."
At 0925 GMT, the shares were up 18% at 8.05p.
