No details yet but I see JPM have upgraded to Overweight now.

...but more detail...

JPMorgan Cazenove upgrades Soco International (SIA.LN) to overweight from neutral, saying the recent share price selloff has left the risk/reward ratio at much more attractive levels. "We believe Soco is one of the more attractive M&A candidates in the European E&P space, given its focused portfolio (essentially Vietnam), rising production profile, attractive valuation and materiality." Says following the results of the TGD well, Soco's intrinsic value is much better defined, thus facilitating any valuation discussions in the event of a bid. Adds at the current share price, exploration upside is an attractive free option. Has a 400p price target.

1.5 mil shares traded......whose buying? I still think TGD is dead and Soco Vietnam will be sold in the not to distant future.

A decent eye catching article in the Evening Standard today

'Soco surges as JP Morgan Bid talk"

Analyst reckons state controlled oil corps will buy Soco from countires in Asia, Koreans, Chinese, Indians & Japanese.

Analyst reckons price tag will be between £4-5/share.

Does anyone know if Soco has done any presentations to analysts recently?

I'm just wondering if the management has hinted in any way that a company sale is likely? The reason I ask is all of a sudden analysts seem to coming onto the idea that M&A is the next move........

Excuse my sceptism but these analysts have'nt exactly been the brightest bunch but they now seem to be ahead of the curve....

Either that or there are potential acquirors that have spoken to these so called banks asking for advice etc and the banks have cottoned onto a sale for Soco is perhaps the next move.

I just think it is interesting to see the 1.7mln share volume today, it makes one wonder.....

SOCO International soars while FTSE 100 sinks into red

http://www.telegraph.co.uk/finance/markets/marketreport/8124516/SOCO-International-soars-while-FTSE-100-sinks-into-red.html

Talking to yourself Isaac???

.....don't wanna put the dampners on your enthusiasm for M&A but with their blocking holdings don't you think management will be the first to know and any M&A will have to be agreed with them first???

..surely Soco is just cheap and oversold...

I think the point your missing is the big stakeholders at this juncture will be willing to sell up IMO.

Why would the management block a bid? The Bid and the Ask has narrowed dramatically, that was the whole purpose of the 2010 drilling programme. Mission accomplished.

In reply to RedTedsRoadshow, post #278

.....don't wanna put the dampners on your enthusiasm for M&A but with their blocking holdings don't you think management will be the first to know and any M&A will have to be agreed with them first???

Of course but I expect it hasn't escaped Isaac's notice that JPM's comments as company broker ought to carry more weight than yer average broker's nod and a wink! Furthermore, Isaac won't have forgotten that an approach was made a couple of years back. Although this didn't materialise into a formal bid, it didn't result in an RNS saying the approach had evaporated. This fits with my understanding that the suitor is still interested. Indeed, as reported elsewhere prior to the approach, my conversation with the Chairman indicated that the board had already drawn up a list of 7 or 8(?) potential suitors.

It is as clear as clear can be that Soco's strategy is to sell whenever they reach the point they feel that no further value can be added. Whether that's now depends on the outcome of TGD negotiations. On that score, maybe we'll learn a bit more tomorrow(?) from the IMS. Whatever, you can be certain that potential suitors will be very aware that SV is well and truly in the slot for somebody to make a move in the not too distant future.

RTT, for once I wouldn't disagree with Isaac.

Essentially the story is mainly out with the loose end being whether or not TGD gets retained. Even with that I don't see the market applying much value to it and any action there would take many months most likely. DRC ex the current final well on Nganzi is imminent so value there easily ascertainable in the v short term. Other DRC again far off. So its easy to see SV as on the block and whether that's a straight sale of the Plc depends on if anyone is interested in the African ops otherwise a straight sale of SV would crystalise the value all the analysts see.

Given the supportive POO and M&A markets, sure, a deal could well be "imminent" and no doubt the big holders would like to get a bump and exit from what has been a relatively disappointing investment over the past three years.

Can anyone see a tie up with DPL in some way?
Flog Vietnam & return to shareholders, but keep a little back for the latest incarnation Soco Africa = DRC + DPL - £50m is a drop in the ocean?
I can feel it in me waters...

robs12 - although ee doesn't think a tie up with DPL makes any sense I do tend to disagree. The market likes a sexy story and Soco is runniing a bit thin on sexy stories! Before the drilling there was a lot of hope in the price for DRC and TDG and the associated fan.

Now we have got to a stage where the upside on Soco is limited all be it by a price much higher than the current share price. The problem is that investors gain confidence in a stock if it has a "lottery ticket" element to it. The chance it can double or triple seems to generate excitement and keep the stock higher. Whey sell when there is a potential 5 bagger type scenario. I think this is all down to human nature. We are not very good at discounting expectations by their relative chance of success. This is something Camelot and every other lottery operator out there knows.


However, it is my understanding that current Soco management are looking for an exit and retirement so they might well be content to just sell out now and cash in their chips.

Well, if RC is looking to retire, DPL will be looking for a new Chair also. Significant factor in my theory!
Take it a year or two & prove up Tanzania & DRC?, then sell out to Anadarko (or whoever).
Anyway, a little off topic, this thread is for analyst's reports...

Hi all,

All this speculation about tie-ups with Tanzania......and emptyend is conspicuous by his silence.......;>

Sorry also for the o/t.

Large losses for BlackRock the past couple of days....

Is this likely to force their hand on Soco? As they are one of the largest holders of Soco.....I know BlackRock have been reducing their position in POG..

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/gono/AAPL%20CSCO%20Losses.jpg

Yeah, Apple has been an awful investment over the past two years :

http://finance.yahoo.com/q/bc?s=AAPL&t=2y&l=on&z=l&q=l&c=

I expect Blackrock are crying into their money!

UBS comment today:

UBS downgrades Soco International (SIA.LN) to sell from neutral but raises target to 340p from 300p. "We believe the market is pricing in a significant M&A premium for Soco, yet in our view the company is not an M&A target because of its exploration portfolio in the Democratic Republic of Congo, which we think would be too risky for a major/National oil company to enter." Shares closed Tuesday at 370p

That UBS comment must have been written by an idiot.

Whilst there is no doubt that the DRC would put off 90% of potential buyers, there is also no doubt at all that the main assets re M&A potential are utterly unencumbered by such considerations.

If anyone would like to send me a copy of their note I could do with a good laugh.

ee

And has he not considered the possibility of an asset sale and return of cash to holders ?

it does seem odd that they should make these comments,

K

Possibly not the best place for this but perhaps relevant here...

....although not new news, it's interesting to see a broker listing SOCO as a bid target....

Nomura Lists 30 Companies As Bid Targets In 2011

Nomura highlights a set of companies that it sees with a higher-than-average chance of being taken over in 2011. It says 2011 will prove to be a year of reinvestment, either through organic investment or through M&A. It lists 30 companies as potential bid targets: Lonmin (LMI.LN), Banca Monte dei Paschi di Sien (BMPS.MI), Xstrata (XTA.LN), ING Groep (ING), Meggitt (MGGT.LN), Man Group (EMG.LN), MAN SE (MAN.XE), SCOR (SCRYY), Vestas Wind Systems (VWS.KO), UCB (UCB.BT), Burberry (BRBY.LN), Shire (SHP.LN), Faurecia (EO.FR), Nobel Biocare (NOBN.VX), Valeo (FR.FR), Actelion (ATLN.VX), Beiersdorf (BEI.VX), Informa (INF.LN), Imperial Tobacco (IMT.LN), ASM International (ASM.AE), Soco International (SIA.LN), TalkTalk Group (TALK.LN), Premier Oil (PMO.LN), Pennon (PNN.LN), Tullow Oil (TLW.LN), Northumbrian Water (NWG.LN), BowLeven (BLVN.LN), United Utilities (UU.LN), Catlin (CGL.LN) and Severn Trent (SVT.LN).