Gulf fuels feud in bid for Clyde Petroleum

The City remained convinced yesterday that Gulf Canada will have to increase the value of its recently launched offer for Clyde Petroleum if it is to secure victory in its hostile bid for the oil explorer.

Shares in Clyde continued to ignore the escalating war of words between the two companies, closing 0.5p lower at 117p, as the stock market continued to believe Gulf's 105p-a-share cash offer was no more than a sighting shot.

With 19 of the bid's scheduled 60 days elapsed, Gulf wrote to Clyde shareholders yesterday in response to the British company's first defence documentissued last Sunday. The Canadian bidder said Clyde's defence contained no new information and dismissed it as an attempt to "change the basis of calculating value, abandoning the traditional and widely accepted approach of net asset value".

Malcolm Gourlay, Clyde's chairman, responded angrily to the "very misleading" claim that there had been no new information. He said Clyde had furnished investors with several new pieces of information including an estimate of year-end reserves of 130 million barrels of oil equivalent, a 60 per cent increase on the 1995 figure, a list of targeted projects and details of Clyde's 1997 drilling programme.

Beneath the rhetoric, Gulf's bid has quickly been reduced to an argument, arcane to observers outside the oil business, over the correct method for valuing oil exploration companies and a dispute over which measure should best be used as a basis for calculating the premium implied by the offer price.

In its defence, Clyde asserted that the most appropriate measure of its value was a multiple of cash flow, similar to what some analysts describe as a "going-concern value", which takes into account the ability of a company's executives to add value to current assets via management and acquisition.

Gulf said yesterday that approach was "fundamentally flawed", favouring the use of a core, net asset value, which tends to produce lower, more conservative values.

Gulf chief executive JP Bryan said: "Oil and gas companies are valued primarily on the basis of their expected future cash flows. The most appropriate valuation methodology is therefore net asset value, which represents the present value of Clyde's projected future cash flows."

Mr Bryan is understood, however, to have told analysts in an initial presentation that a fair value for Clyde would be a 25 per cent premium to the company's "going-concern" value.

The market has focused on that measure and applied it to the latest estimate from Clyde's broker, Hoare Govett, of 95p to justify the current share price.

News
people
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
PROMOTED VIDEO
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
News
ebooksAn unforgettable anthology of contemporary reportage
News
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
News
i100
Sport
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
boxing
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments