March 1, 2013 10:56 pm

Valiant up nearly a third after Ithaca deal

Shares in Valiant Petroleum, the North Sea-focused oil group, jumped nearly a third on Friday after it finally concluded a sales deal, six months after it formally put itself on the block.

But the £203m cash-and-shares offer from Aim-quoted peer Ithaca Energy still left shareholders who kept hold of the stock following the announcement of a sales process in September nursing small losses.

Ithaca is preparing to spend $360m on its Greater Stella Area development in the central North Sea in an investment that could lead to its revenues and profits more than doubling by 2014.

Ithaca said the acquisition of Valiant would add $500m in UK tax allowances to the expanded group – a tax incentive that its chairman Jack Lee said would aid its ambition to establish itself as a profitable North Sea operator capable of producing 25,000 barrels of oil equivalent a day.

Friday’s recommended deal valued Valiant at 475p, based on an offer of 307p in cash and 1.33 of Ithaca shares that traded at C$1.97, or 126p, on Thursday.

The sales process led to Peter Buchanan, who founded Valiant, stepping down as chief executive in November in the hope of leading a management buyout of the company.

Mr Buchanan also serves chairman of Brindex, the Association of British Independent Oil Exploration Companies, and has stayed on as a director but not attended board meetings since temporarily relinquishing his executive role.

Shares in Valiant rose to 455.5p on Friday, still leaving them down by a 10th over the year but well above a low of 340p hit last week.

Meanwhile, shares in its suitor Ithaca, which hit a high of C$3.26 last March amid its own unfulfilled takeover talks, fell back by 7 per cent to C$1.84.

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