Ophir Energy no longer interested in Premier oil

Oil and gas explorer Ophir Energy said yesterday that it was no longer interested in a takeover of rival Premier Oil after it was rebuffed twice by its target.

The company said in a statement that an approach it made to Premier's board for merger of the two businesses was rejected twice.

According to Ophir, "it is no longer considering making an offer for Premier" .

Under UK takeover rules Ophir is banned from making another offer for six months, unless it was invited by Premier's board.

A combination of the two companies would have created a £3-billion company, the fifth largest oil and gas explorer listed in London, after BP, Shell, BG and Tullow Oil.

The deal would also have allowed loss-making Ophir to leverage Premier's substantial cash flow from its production assets in the North Sea, Vietnam, Indonesia and Pakistan.

It was understood that Ophir felt it could not make a hostile takeover offer for its rival.

Hostile takeovers often meant that an acquirer had limited access to due diligence materials and would need a significant premium to win the backing of target shareholders.

According to analysts at Oriel Securities, given this announcement and Ophir's cash pile ''around $1.5 billion (£890 million)'' they would not be surprised if the company continued to look for other acquisitions, London Evening Standard reported.

However, the deal disappointment apart, the wider market remained buoyant. The newspaper quoted Chris Beauchamp, market analyst at IG, as saying that the week had got off to a good start and renewed merger and acquisition activity was leading the company back [up].