Cairn flares up on takeover talk

Market rumours that Cairn Plc was being bought over by BP for a possible consideration of £3.6 billion saw its group company Cairn India's scrip touching a 52-week high of Rs 216.8 on Wednesday. The scrip settled at Rs 204.75 a share, up 7% over previous close on the Bombay Stock Exchange.

The rumour triggered in the London market saw shares in London Stock Exchange-listed Cairn Plc, soar nearly 8% to reach its highest level of the year. Media reports from London said the jump valued the group at just under £3 billion.

Sources said the rumour came in the wake of the recent approaches by Eni, the Italian giant, and the Korean National Oil Company for Burren Energy though the latter does not have any relation with the Cairn group.

"Mid-cap oil exploration companies like Cairn, Premier, are being seen as being the possible target for acquisition by bigger companies," said an industry source. When contacted, a senior Cairn India executive did not deny that Cairn Plc could be one of the mid size companies under the radar of big oil companies but added that such rumours have been doing the rounds for some time now.

Denying any stake sale in Cairn India, its spokesperson said, "Cairn India's management is focussed on delivering the substantial growth that it believes is in the business." He said there "has and always will be rumours or speculation" about the company. "We do not and never will comment on the rumours and speculation. We get on with running the business to ensure we deliver the growth," he said.