Ophir, focusing on West and East Africa, plans to buy as much as $100 million of shares, the London-based company said today in a statement. It held about $1.5 billion in cash at June 30. Genel yesterday said it bought 155,000 ordinary shares for 750.2887 pence each from JPMorgan Securities.
Genel jumped 7.6 percent to 810.5 pence, the biggest gain since March 2012. Ophir climbed 6.7 percent to 211.7 pence, the biggest gain since November.
While Genel’s purchase represents about 0.1 percent of its shares, “the intention signal is more important than the quantum,” Investec Bank Plc said today in a note. Shareholders in Genel, with projects in Iraqi Kurdistan, on April 22 gave it approval to buy as much as 10 percent of its voting shares.
“We feel that the shares are materially undervalued, as they dropped 25 percent in the past two weeks, so we believe this is a good use of shareholder money,” Andrew Benbow, a London-based spokesman at the company, said by phone. It was Genel’s first share buyback.
Ophir Energy Chief Executive Officer Nick Cooper said the company is undervalued. “With our shares at such a low level, don’t expect us to be using our shares as currency,” he told analysts on a conference call. “Anybody putting themselves up for sale at the moment is taking a risk.”
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