Faroe Criticizes DNO’s Takeover Bid as ‘Opportunistic’
The oil and gas company with focus in Norway and the U.K. Faroe Petroleum has reaffirmed that Norwegian oil giant DNO ASA’s GBP608mln ($761.65 million) unsolicited takeover offer for the AIM-listed firm is “opportunistic” and “substantially” undervalues it.
Aberdeen-headquartered Faroe accused DNO of trying to exploit the recent drop in oil prices to acquire the company “on the cheap”.
In a statement on Wednesday, Faroe simply said it noted DNO’s offer and encouraged its shareholders to take no action.
“The Board reaffirms its previous statement that the offer is opportunistic and substantially undervalues Faroe, and encourages all shareholders to take no action. Furthermore, the Board believes that DNO’s offer document contains no substantial new information or arguments to support its Offer,” said the statement.
“DNO’s unsolicited offer ignores Faroe management’s proven track record and the Company’s exciting independent future, which has been further enhanced by the recently announced Equinor asset swap,” it added.
John Bentley, Faroe’s nonexecutive chairman commented, “DNO’s highly opportunistic offer is not only at a substantial discount to the value of the Company but also at a substantial discount to comparable portfolio transactions and a substantial discount to the average of all U.K. takeovers in the last 10 years.”
“Faroe is widely regarded as one of the preeminent North Sea E&P companies with a high quality, full cycle and diversified asset base and a management team that, time and again, has demonstrated its ability to create value through exploration and active portfolio management. As such, Faroe would solve DNO’s strategic challenges and Faroe shareholders should receive an appropriate premium which is not currently reflected in DNO’s offer,” he added.
Earlier, DNO published details of its hostile cash offer for Faroe, calling it a “rare opportunity” for shareholders to exit the company.
DNO, which already owns 28 percent of Faroe, is offering 152p per share offer for Faroe, a 21 percent premium to Faroe’s price the day before the offer was made in November.
Source: www.oedigital.com
