Broker snap: Rockhopper still a buy as takeover speculation continues

23rd Jan 2012 10:28

Merchant Securities has reiterated its buy stance on Rockhopper Exploration as rumours continue to 'do the rounds' in relation to possible buyers of the Falklands-focused oil and gas group.At the weekend, the Sunday Times said that US firm Anadarko Petroleum Corp is mulling over whether or not to make a move on Rockhopper, after a team of executive flew to the Falklands last week to meet with the firm's managers."We believe that Rockhopper's assets are of the same geological family as Anadarko's assets on the East Coast of Africa. We are therefore not surprised that Anadarko is taking a serious look a Rockhopper," said Merchant analyst Brendan Long. Long added that any investment from Anadarko would represent an American interest which would dispel political risks.Merchant Securities has maintained its 428p target price on Rockhopper."It is possible that companies are currently considering to either enter the data room (and sign confidentiality agreements which could limit a takeover of Rockhopper) or to make a pre-emptive bid for the entire company due to its attractive valuation," Long said.Last week, the Sunday Times reported that FTSE 100 firm Cairn Energy is interested in taking over Rockhopper's key asset, the Sea Lion field, 80 miles north of the Falklands.Rockhopper's shares were up 5.5% at 340.25p by 10:18.BC