Newspaper article The Evening Standard (London, England)

Wood Gets Lift from Amec Bid Hopefuls

Newspaper article The Evening Standard (London, England)

Wood Gets Lift from Amec Bid Hopefuls

Article excerpt


SHARES in the oil industry services specialist Wood Group climbed backabove 400p with a leap of 2414p to 405p on talk that it may soon find itselfthe target of a bid from the infrastructure services group Amec, 212p better at741p.

Word is Amec is toying with the idea of making an offer at a considerably aboveWood's current stock market valuation. Speculators say Amec is lining upbetween 525p and 570p a share, which would give Wood group a [pounds sterling]3 billion tagcompared with its current value of around [pounds sterling]2 billion.

Business is booming at Wood with the group benefiting from a soaring oil price,which has encouraged the big oil companies to step up their explorationprogrammes.

Premier Oil rose 11p to 1185p despite Credit Suisse dropping its rating fromoutperform to neutral.

But the broker has repeated its outperform rating on BG Group, unmoved on 986p,saying it believes the blue-chip can grow its net asset value over time to1125p a share, underpinned by a risked resource base of 10 billion barrels ofoil equivalent which has been boosted by recent exploration


By extending its exploration and production methodology over BG's explorationportfolio, it gave a blue-sky net asset value estimate of 1380pequivalent to 39% upside.

Having looked at its oil price and net asset value assumptions across thesector, the broker reduced its recommendation on Premier Oil to reflect alowered price target of 1253pdown from 1264p. It has cut its target on Burren Energy, up 14p at 1090p, from1114p to 1100p, on Tullow Oil, 412p dearer at 580p, from 671p to 669p and onCairn Energy, 14p higher at 2266p, from 2262p to 2229p.

Shares generally posted modest gains and the FTSE 100 index rose 14.1 to6276.2.

Rio Tinto surged 103p to 5418p despite denying it was in bid talks with theChinese authorities. …

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