Indian Oil may hike its £400 million unsolicited bid for Gulfsands Petroleum

Indian Oil Corporation (IOC) is likely to hike its takeover offer for Middle East-focused gas exploration and production company Gulfsands Petroleum Plc after the UK-based company today rejected IOC's £400 million (Rs2728 crore) unsolicited takeover offer.

Public sector oil marketing company IOC, India's largest commercial company by revenue, had made an £400 million unsolicited acquisition offer on 18 March for the London-based and AIM-listed independent oil and gas explorer Gulfsands Petroleum.

The board of Gulfsands, without naming the bidding company, today rejected an unsolicited takeover offer, saying that the £400 million offer ''Is wholly inadequate and materially undervalues the company.''

Citing a source close to the deal, The Financial Times, however said today that the mystery bidder was IOC and that the Indian oil major will consider its options over the weekend, and could raise its 350 pence a share offer.

Gulfsands said that it is not currently involved in any process to solicit offers and is confident of its strategy to become a pre-eminent exploration and production company in the Middle East and to continue to demonstrate tangible growth.

IOC, which is being advised by the UK-based financial advisory firm Seymour Pierce, has approached several of Gulfsands' large UK institutional shareholders, including Schroders, a £148.4 billion assets management company that holds 22 per cent stake in Gulfsands, before making its bid.