Special Feature
As detailed in the June issue of our magazine, on the 11th May Mr Mahdi Sajjad (a director) purchased 30,000 shares at 111.75 on behalf of a Discretionary trust his children are beneficiaries of, taking his total beneficial holding up to 8.65m shares. Back in February, Chairman Andrew West also purchased 17,500 shares at 179p. There is a further intriguing spin on the Gulfsands story and that is the stake-building by both Michael Kroupeev (the Russian oil financier who has amassed a stake of 18% of the shares in the past few months) and also Soyuzneftegaz (a group headed by Yuri Shafranik, Russia’s former energy minister) that has picked up 3.4%. Clearly these boys see value and they each have prior ‘form’. Rumours of predatory takeover interest by CNOOC (China National Offshore Oil Corporation) are likely to commence in earnest again at these depressed levels.
50 | www.financial-spread-betting.com | July 2012
Recall also that back in April 2010 Gulfsands received an unsolicited joint bid proposal from Oil India Ltd & Indian Oil Corp Ltd at a price of 315p (over 3 times the current price and illustrative of the type of re-rating that will likely occur should the Syrian situation reach a positive conclusion) and that was unanimously rejected as undervaluing the company at that time. It is worth pointing out too that management are totally aligned with shareholders and highly incentivised to restore value given their combined interest of 17%of the equity. Should political signs of stabilisation and/or Government change in Syria become apparent, then I fail to see how the shares cannot dramatically re-rate or, alternately, be swooped upon by a predator. This becomes our 5th Conviction Buy recommendation some people will say too risky - we believe it has been overly discounted, and then some.