Upland Resources (LON: UPL) shares are down 40% today as the potential bid offer turns out to be more of a fantasy than anything serious. Hey, sometimes these things happen, someone gets it into their mind to try and make a splash and then the wheels come off that particular cart.
We have spoken before of Upland Resources: “On the other hand the news is good: “Upland Resources Limited (LSE: UPL) is pleased to announce significant progress in the development of Block SK334 in Sarawak. The Company, together with its joint venture partner in Sarawak, Big Oil Ventures sdn bhd (together "Upland Big Oil" or "UBO") are now in the formal process of assessing an onshore rig capable of developing Block SK334 in Sarawak.” “
Much more recently there was talk of a takeover bid: “The Board of Upland notes the recent media speculation concerning the possibility of an offer being made for the entire issued and to be issued share capital of Upland. The Board of Upland confirms that it has received an unsolicited, very preliminary approach regarding a possible offer for Upland at an indicative price of 14p from a potential offeror referred to in the approach as SEC Capital ("Potential Offeror"). The Board has unequivocally rejected the approach as it believes it significantly undervalues the current potential of the Company.”
Well, the board were certainly confident rejecting a big at 14p - the share price was 4 and 5p at the time.
Upland Resources share price from Google Finance
Which brings us to today’s announcement: “Subsequent to the 'Offer Period' beginning, the 'Potential Offeror' became unengaged and failed to sustain communications with Upland. Further investigation and evidence eventually led to the conclusion that the 'Potential Offeror' was not bona fide. This was confirmed by the Takeover Panel and subsequently announced.
The Board will seek further advice on any action to be taken and support any investigations by the relevant authorities.”
Basically, anyone can make a takeover offer for anyone. Further, that the offer has been made is news and must be reported. Even if there’s no obvious evidence that anyone’s being serious, could pull it off or even wants to. That’s just one of the risks of transparency.
Of course, now that the offer has been shown not to be real - or at least realistic - that bid premium in Upland Resources share disappears. Even if it was never really there.