Cove Energy shares tumble on Mozambique tax concern

Bid target Cove Energy said it was seeking clarity from Mozambique on a possible levy related to the sale of the British gas explorer, raising the prospect of a tax battle and potential delay to the $1.8bn (€1.36m) deal.

Irish company Cove, which owns a stake in an enormous gas discovery off the Mozambique coast and put itself up for sale in January, is facing uncertainty over tax issues after Mozambique said it wanted to introduce capital gains tax on the sale of the company.

Yesterday, shares in Cove fell as much as 10.8% to 201.5p, below the 220p-per-share, or $1.8bn, offer planned by Thai state oil firm PPT and oil major Shell’s 195p proposed bid.