PERTH: The Australian sharemarket was driven higher by energy stocks today as Woodside Petroleum’s takeover bid for smaller rival Oil Search sparked “buyout fever” among investors which more than offset the effect of overnight oil price declines.
At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index had gained 84.8 points, or 1.69 per cent, to 5115.2, while the broader All Ordinaries had lifted 82.5 points, or 1.63 per cent, to 5133.5.
The Australian oil and gas company this morning lobbed an $11.6 billion offer for the PNG-focused explorer and producer, representing a 14 per cent premium to Oil Search’s close yesterday.
The surprise move led to a strong rally in the energy sector, which lifted the bourse despite 4 per cent declines in oil prices overnight.
IG market analyst Angus Nicholson said “buyout fever was in the air” following Woodside’s bid confirmation.
“Now that Oil Search is in play, it will be interesting to see if other suitors come out of the woodwork, potentially pushing Woodside to the side,” Mr Nicholson said, adding that smaller energy names AWE and Beach Energy had rallied “likely on their prospects as buyout targets”.
“The performance of the utilities sector have also been stoked by asset sales today, rising 2 per cent,” Mr Nicholson said, adding that investors had particularly been enthusiastic about the $532m of AGL Energy’s 50 per cent stake in the Macarthur Wind Farm.
However, Chinese trade balance numbers provided a check to sentiment with the 13.8 per cent decline in the dollar value of imports well beyond consensus expectations of an 8.2 per cent drop.
