BowLeven Plc, the U.K. oil explorer focused on Cameroon, jumped as much 20 percent in London on speculation that Tullow Oil Plc may bid for the company.
The shares jumped as much as 14.75 pence to 88.75 pence in London trading, the biggest gain since Oct. 14. The shares traded at 87 pence at 11:24 a.m. local time.
“The shares are rising on speculation” that Tullow may make a bid, Tracy MacKenzie, an analyst at Brewin Dolphin Securities Ltd., said by phone. Spokesmen for London-based Tullow and Edinburgh-based BowLeven declined to comment.
BowLeven raised $124 million in a share sale on Oct. 19 with a 36 percent increase in ordinary stock capital. The funds will be used for a drilling program this year. The shares surged 60 percent on Oct. 14 after the Sapele-3 well discovered oil in the Douala Basin at the Etinde permit in Cameroon.
“We think more likely than not that BowLeven will partner and secure funding,” said Stuart Joyner, an analyst at Investec Securities in London. “That would be positive for the shares but its negotiating position is weak and downside risks in the event of a no deal are considerable.”