Afren plummets after calling off talks with Seplat

Oil explorer Afren has called off negotiations with Seplat Petroleum regarding a possible bid for the company.

On 22 December Seplat tabled what was described as a highly preliminary proposal to acquire Afren.

Under the UK Takeover Code Seplat was required to either announce its firm intention to proceed with a purchase or retreat by no later than 17:00 on 13 February.

However, the UK-listed group’s management team reached the determination that it “has not received any proposal from Seplat that it believes is capable of being implemented on terms satisfactory to all relevant stakeholders in the company, including the indicated value being significantly below the aggregate value of the debt of the company.”

Afren also notified shareholders that it was continuing to talk to bondholders regarding the funding needs of the business.

It announced that it was having discussions with both its existing stakeholders and new third party investors regarding the recapitalisation of the company.

As of 14:29 shares in Afren were plummeting by 28.81% to 5p.