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Parkmead won’t pay more for Lochard

Parkmead won’t pay more for Lochard

Acquisitive North Sea group Parkmead (LON:PMG) has told Lochard shareholders it won’t increase its offer for their company.

Parmead, run by the team that built Dana Petroleum prior to its US$1.7bn sale, launched an all paper deal for Lochard in May.

Through the deal it stands to acquire a 10% stake in the Ithaca operated Athena field, which currently produces around 11,000 barrels a day gross.

Giving shareholders 0.385 Parkmead shares for every Lochard share, the deal was worth £14.5mln at the time. The offer was recommended by Lochard’s board and Parkmead has so far secured 41.4% of the issued shares.

However, one group of investors, together owning 20.37%, rejected the offer saying that it materially undervalued the company, which they believe to be on the way to profitability.

Parkmead has now stated that it won’t increase the value of its offer, which it formulated based on the anticipated future performance of the Athena field.

“Having undertaken full technical, financial and legal due diligence of Lochard Energy and its assets, the board of Parkmead believes that its offer for Lochard Energy reflects fully the value of Lochard Energy,” Parkmead said in a statement.

“Therefore, Parkmead confirms that its offer of 0.385 Parkmead Shares for each Lochard Energy Share is final, and that this offer will not be increased.

On June 7, Lochard told investors it was the opinion of the board that the company as a stand-alone entity would not be able to fund its share of future commitments from January 2014.

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