Bowleven could be Dragon's new flame

The City's inability to keep a secret was highlighted yet again on Friday morning as Bowleven's share price surged, prompting fellow oil and gas company Dragon Oil to admit it is running the rule over the company.

Shares in BowLeven, which has oil and gas assets in West Africa, moved up steadily throughout the morning to just under 90p from their overnight level of 74p, before kicking into overdrive as Caspian Sea-focused oil and gas giant Dragon Oil confirmed its interest.

Dragon Oil, which is listed in both the UK and Ireland, said it is only in the early stages of deciding whether to launch a bid for BowLeven, and said that confirmation of its nascent interest does not constitute an announcement of a firm intention to make an offer under Rule 2.7 of the City Code on Takeovers and Mergers.

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Under City rules, Dragon Oil has to make a bid for BowLeven or walk away - "put up or shut up" in City parlance - by no later than 5:00pm on March 16th.

If it does walk away, it will be prevented from making an offer for BowLeven for six months unless a rival bidder emerges.

Bowleven had no comment to make about the Dragon announcement, other than to acknowledge it had seen it and to offer to let shareholders know if there are any further developments.

The shares of BowLeven shot up to 134.75p in the wake of Dragon's announcement before pulling back to around 124p at the end of the lunch-time trading session.

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