MIDAS SHARE TIPS UPDATE: Oil group Petroceltic International gushes as rival agrees with us and bids

• e-mail

There is great news for investors in Petroceltic International, the oil and gas group with interests in Algeria, Egypt, Bulgaria and elsewhere. 

The company last week received a 230p-a-share bid from larger rival Dragon Oil, an approach that saw the market price surge from 178p to 215.25p. 

Midas tipped the shares in March 2009 at the equivalent of 100p and last looked at them four months ago, when they were 147p and the group had just raised $100million (£62million) to fund future growth.

Lucky strike: Brokers hope a bigger offer will come

We suggested the shares were good value and it seems that Dragon Oil agrees. The offer values Petroceltic at just under £500million and the board is minded to recommend it, provided the bid is made firm, major shareholders approve and the Algerian government gives the deal the nod. 

Meanwhile, some brokers are hoping that Dragon’s approach will flush out an even more generous offer and are talking of a 250p-a-share bid. 

Midas verdict: Petroceltic shareholders are in a pretty good place. Their shares have risen and it looks as if they will end up with a decent cash price for their stock. They should sit tight and keep a close eye on developments.