By Thomas Escritt
AMSTERDAM, Nov 10 (Reuters) – Shares in Dutch oil services company Fugro NV jumped on Monday as the purchase of a stake by rival Boskalis fuelled talk of a possible bid for the troubled company and boosted shares in the industry across Europe.
Fugro shares were up 33 percent at 18.75 euros by 1130 GMT, lifting Norwegian rival PGS for example 5 percent as the Boskalis move sparked speculation of a spate of deal-making in a sector which has been squeezed by cuts to oil company investments.
Long seen as a reliable earner because of its position in the expanding hydrocarbons business, Fugro has lately been hit hard by the falling oil price which has led oil majors to reduce investment in areas like exploration.
Norwegian oil industry survey firms, some of Fugro’s top competitors, also rose on Boskalis’s move, announced after European stock markets closed on Friday. TGS Nopec was up 3.3 pct and Polarcus, a smaller Norwegian surveyor, leaped 18.3 percent.
Fugro, which is also deploying its undersea survey vessels in the search for Malaysia Airlines’ missing flight MH370, last month scrapped its 2014 dividend after its third profit warning of the year.
While Boskalis denied it was planning a takeover, the surprise purchase of the 14.8 percent stake led many to expect a bid. “The genie is out of the bottle,” said Rabobank analyst Michel Aupers in a note. “Fugro management is no longer in charge of its own destiny and the company is in play.”
Fugro said Boskalis’s stake purchase was “unsolicited and unexpected” but it was open to cooperation on specific projects.
“Fugro is interested to discuss a partnership with respect to its subsea division with … parties including Boskalis,” it said in a statement, though remaining independent was core to its strategy.
Boskalis said it wanted to discuss cooperation with Fugro but had no intention of making an offer.
The falling oil price particularly affects Fugro, since it specialises in surveying difficult-to-reach oil fields deep beneath the ocean that are worth exploiting only when the oil price is high.
Boskalis, one of the world’s largest marine engineering firms, has been involved in projects including removing the wreck of the stricken cruise liner Costa Concordia from the coast of an Italian island and dredging the Suez Canal.
Other oil services and engineering companies up after Boskalis’s move included SBM Offshore, Subsea 7 , John Wood Group and Tecnicas Reunidas , all up between 2 and 5 percent. (Additional reporting by Balazs Koranyi in Oslo; Editing by Anthony Deutsch and David Holmes)
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