Norwegian oil and gas operator DNO ASA has increased its stake in oil and gas explorer Faroe Petroleum despite the latter’s objections to the former’s hostile takeover bid.
Before the latest acquisition announced on Thursday, DNO owned a 28.22 percent in Faroe Petroleum.
In a statement on Thursday DNO said it had acquired 6,246,152 shares in Faroe Petroleum at a weighted average price of 151.95 pence per share.
Following these transactions, DNO owns 111,494,018 shares representing 29.90 percent of the outstanding shares in Faroe.
It is worth mentioning that earlier on the same day Faroe published its response circular in relation to DNO’s unsolicited offer where it reaffirmed its previous statements that DNO’s offer is opportunistic and substantially undervalues Faroe, and encouraged all shareholders to take no action.
To remind, it all started in November when DNO said it would launch a takeover bid for Faroe Petroleum and offer 152 pence in cash for each Faroe share, valuing Faroe’s existing issued and to be issued share capital at approximately £607.9 million.
This prompted Faroe to urge its shareholders to take no action in relation to their Faroe shares. Faroe said that DNO’s bid looks opportunistic coming on the back of recent weakness in commodity markets and that Faroe’s strong balance sheet and growth trajectory means it is relatively well insulated against short-term oil price moves.
Staying adamant in its intentions, DNO in December presented its takeover bid to Faroe shareholders on the same terms announced in November.
“This full and fair offer provides Faroe shareholders a rare opportunity to exit their relatively illiquid AIM-listed positions at an attractive price in a volatile and uncertain market for oil and equities,” said Bijan Mossavar-Rahmani, Executive Chairman of DNO.
Faroe again urged shareholders to ignore the unsolicited takeover offer by DNO, saying the 152p a share offer was opportunistic and undervaluing Faroe.
“DNO’s opportunistic Offer seeks to exploit the recent oil price fall to acquire Faroe on the cheap,” Faroe Petroleum said earlier in December.
Offshore Energy Today Staff