Reabold has confirmed that it is in discussions with Union Jack Oil regarding an all-share offer to combine the firms.

The London-based investment holding company, which explores and evaluates oil and gas projects, said it believes its combination with Union Jack would create a “group with greater scale, superior access to capital and other compelling operating efficiencies”.

Union Jack said that its board has evaluated the proposed transaction with its advisers and has given Reabold due diligence access. It has told its shareholders to take no action at this time, and a further announcement will be made when appropriate.

Under takeover rules, Reabold must announce a firm intention to make an offer for the firm or state that it does not intend to make an offer.

Following the announcement, shares in Union Jack Oil increased by over 23%.

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