Market Report: San Leon reveals a deal of its own

The company said it has secured $100m in debt and is “in advanced discussions” to raise the remaining $80m

Oisin Fanning is an unpredictable fellow. No sooner had the Irishman’s struggling oil company, San Leon Energy, told investors that takeover talks had ended than it revealed a deal of its own.

The shares firmed 1.125p to 29.25p before they were suspended as the AIM-listed company said it was teaming up with Nigerian oil firm Midwestern to buy Canada’s Mart Resources, which produces oil in Nigeria.

In a complicated deal, San Leon is raising $180m (£125m) – around seven times its stock market value. Of this, $62.6m will pay for Mart. But it opens the door for San Leon to production in a country where a large chunk of the revenues is hedged at $95 a barrel – three times the current price of Brent crude.

The company said it has secured $100m in debt and is “in advanced discussions” to raise the remaining $80m. If San Leon doesn’t pay Mart by 17 February, it will have to stump up $2.2m in fees.

The Mario Draghi-inspired rally continued as hopes of more economic stimulus from the European Central bank helped the FTSE 100 shoot up 126.22 points to 5,900.01 for its first weekly rise in 2016.

The property giant Hammerson, owner of the Bullring shopping centre in Birmingham, revealed that it has bought the new Grand Central shopping centre in the city for £335m. The shares rose 9.5p to 569.5p.

Home Retail Group gained 7.5p to 144.7p, having started the week at 158p, as broker Exane BNP Paribas removed its “underperform” recommendation. The deadline for Sainsbury’s to make a bid for the Argos owner is 2 February.

Character Group jumped 24p to 502.5p as it confirmed that sales of its big toy brands, including Fireman Sam and Peppa Pig, were “very encouraging”. It also told shareholders that founder and executive chairman Richard King would be taking a back seat as a non-executive director and chairman.

7digital danced 1.38p or 22 per cent higher to 7.5p as chairman Sir Donald Cruickshank, the former Stock Exchange chairman, showed his faith by buying £40,000 worth of shares in the music streaming firm out of his own pocket.