Afren stabilises after Seplat wins takeover deadline extension

Shares in FTSE 250 oil group Afren have been injected with new momentum after Seplat Petroleum Development, its Nigeria-based suitor, successfully applied for a 11-day deadline extension to agree a merger or takeover deal.

The UK Takeover Panel has extended Seplat's deadline to 17:00 on Friday 30 January, after it was due to expire on Monday afternoon, having made a "highly preliminary" approach on 22 December concerning a possible combination with Afren.

Last Thursday Lagos-based Seplat secured the option to raise $700m of debt to fund acquisitions

The group said that it had refinanced with $1bn of new facilities and has an option to increase the facility by up to $700m for "qualifying acquisition opportunities".

Seplat now has until 30 January to either announce a firm intention to make an offer for Afren or announce that it does not intend to make an offer, or can apply for a further extension.

Afren shares had dropped sharply earlier last week after the group said reserve estimates for its part-owned Barda Rash field in the Kurdistan region of Iraq were revised sharply lower.