‘Faroe had a good run. The baton now passes to DNO’

Norwegian oil company DNO is taking over Faroe Petroleum. After weeks of resisting DNO’s hostile bid of 150p a share, the Faroe board finally yielded. DNO on Tuesday raised the bid to 160p for shares it didn’t already own and reached controlling interest of over 50 percent. Faroe Petroleum board then, not overly enthusiastically, told shareholders to accept the offer.

Come Thursday, DNO which had a day earlier owned about 52 percent ownership in Faroe, said it had acquired a further 75,925,066 Faroe Shares, in aggregate representing approximately 20.36 percent of the ordinary share capital of Faroe Petroleum plc.

“As a result of the Additional Purchases, DNO now owns or has acceptances for a total of 271,456,134 Faroe Shares, representing approximately 72.80 percent of the ordinary issued share capital of Faroe,” DNO said.

DNO’s final cash offer of 160p for the entire issued and to be issued share capital of Faroe not already owned by DNO is expected to become unconditional in all respects on January 11, 2019.

According to DNO, the final offer of 160p values Faroe’s existing issued and to be issued share capital at approximately £641.7 million ($819 million).

A recent report by GCA concluded that “the value of Faroe’s oil and gas assets more reflective of current (late December 2018) market oil pricing is in the range of US$879 million – US$1,076 million.”

Pass the baton

Bijan Mossavar-Rahmani, Executive Chairman of DNO ASA, said: “The majority of Faroe’s shareholders have now spoken and the Faroe board has disclosed that its members, too, will accept DNO’s offer in respect of their own holdings. We also note, and appreciate, the intent of Faroe’s board to work with DNO to ensure an orderly transition of control of the company. That is indeed in the interest of all stakeholders.

“We have stated from the outset that we firmly believe that Faroe’s assets, the substantial part of which are Norwegian, will be well placed in the bosom of DNO, Norway’s oldest independent oil and gas company. We have also repeatedly stated that DNO attaches great importance to retaining the knowledge and expertise of the Faroe team whom, we believe, in partnership with DNO can extract increasing value from the Faroe assets.

“Any Faroe shareholder who wishes to follow these assets to DNO, if transferred, and join our more than 16,000 shareholders, 96 percent of whom are proudly Norwegian, will be welcome.”

“It is in the nature of our industry that entrepreneurs with vision, fortitude and a dollop of luck can create small, successful companies that are in time sold to larger ones with greater managerial and operational depth and stronger financial firepower and which, in turn, are swallowed by even larger companies.

“Faroe had a good run. The baton now passes to DNO,” Mossavar-Rahmani said.

Offshore Energy Today Staff

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