Schroders to stand by Clyde

Gulf Canada has given up hope of gaining the support of Clyde Petroleum's largest shareholder as its pounds 500m bid for the British oil explorer approaches a nail-biting climax, writes Tom Stevenson.

Schroders, which holds 19 per cent of Clyde's shares, is understood to see more value in the company than Gulf's final 120p-a-share offer which closes next Tuesday, and is expected to stand by the incumbent management.

Schroders' decision could be enough to swing the bid in Clyde's favour after PDFM, its second-largest shareholder, sold its 14.6 per cent stake earlier this week. That gave Gulf just under 29.9 per cent of Clyde, the limit imposed by Takeover Panel rules, and appeared to put the Canadian company in a commanding position.

Gulf is focusing its efforts on securing the 20 per cent it needs from holders of the 50 per cent of shares not held by itself or Schroders.

Schroders would not comment yesterday on its decision, except to say that it had not yet made up its mind. Gulf has meetings scheduled for today and tomorrow with undecided shareholders, including Schroders, at which it will attempt to gain the support of the remaining floating voters.

In a final exchange of letters yesterday the two sides wrote to shareholders with their final arguments. Gulf focused on the potential for a fall in Clyde's share price, if it escapes the bid.