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Market Report: Gulf Keystone Petroleum soars as key departures leave it vulnerable to takeover bid

Gulf Keystone Petroleum roared higher yesterday amid rumours that the exit of the chairman and founder Todd Kozel could leave the Kurdistan-focused oil and gas explorer vulnerable to a takeover bid.

With Mr Kozel heading for the door, speculation is swirling that oil majors are mulling offers for the company in a bid to get hold of its crown jewel, the Shaikan oil field. Shaikan, in which Gulf Keystone holds a 75 per cent stake, is the world's largest independent onshore oil field. Exxon Mobil and Chevron are discussed as potential bidders, with hopes of a hefty premium. Gulf Keystone added 14.75p to 95p.

Takeover talk also drove Kenmare Resources 3.75p higher to 15.75p, after the Dublin-based miner revealed it had rebuffed a merger offer from Iluka Resources. Punters hope the Aussie miner will return to the table with a better offer, with JP Morgan saying that "any sensible bid could be well received by Kenmare shareholders".

The top-flight index just managed to mark its first positive session of the week, up 1.50 points at 6,735.12.

Housebuilders helped markets higher, with traders buying into "light touch" measures on mortgage lending from the Bank of England. Persimmon was 60p better at 1,259p and Barratt Developments added 16.6p to 362.9p.

Private investors bought into AA at a knockdown price on its first day of unconditional trading. The road-rescue company rose 5p to 242p but is still shy of its 250p offer price.

On the mid-cap index, the packaging group DS Smith became the latest company to suffer from the strong pound. Despite profits doubling to £167m in the year to April, it slipped 18p to 2,877.3p after warning that earnings this year will be hit by unfavourable exchange rates.

Ophir Energy announced its fourth failed well in six months, as its latest drill in Gabon came up empty. It fell 9.3p to 231.2p.

The AIM-listed travel operator Dart Group warned that operating profit for the year ahead is likely to be below expectations, after a lull in summer bookings. It hiked its dividend by 47 per cent to 2.74p in light of a solid performance in the year to March but the shares fell 61.25p to 190p.