PGS Rockets 15% On News Of Reduction In Acquisition Price

Petroleum Geo-Services shares climbed by seventeen percent after the world's second largest mapper of oil reserves agreed to reduce the acquisition price that it is seeking from rival Veritas DGC of Houston a second time.

PGS shareholders would own about fifty five percent of the combined company, compared with the fifty six percent under terms set three months ago and the sixty percent under an initial November accord. The shares climbed 4 kroner to 28 in Oslo, their biggest gain since April 2nd earlier in the year.

“It shows that their merger is still alive, which clearly is positive for PGS,” said Kristian Tunaal, an analyst at Gjensidige NOR Equities in Oslo. “Veritas has softened the conditions around the Atlantis sale” giving PGS more room to maneuver.

PGS cut its valuation in April to facilitate the merger, which is delayed by the pending sale of its Atlantis natural gas unit. PGS would need to sell new shares or assets to stay afloat if the asset sale or merger collapses, analysts have said.

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