DNO extends 152p bid deadline for Faroe. We’re worth more, Faroe board says
- Business & Finance
Oil company DNO has extended the deadline for Faroe Petroleum shareholders to accept its 152 pence a share takeover bid, giving them time until mid-January.
DNO said on Thursday it had increased its holding to 30 percent of Faroe’s shares.
It said its 152 pence offer for each Faroe share was now a mandatory offer under the Code (Rule 9).
The mandatory offer will remain open for acceptance until 1.00 p.m. (London time) on 18 January 2019 (the “Second Closing Date”).
Since the initial launch of the offer back in November 2018, Faroe Petroleum’s board has advised the shareholders not to act upon it, deeming the offer opportunistic and one undervaluing Faroe Petroleum.
North Sea-focused Faroe on Wednesday, prior to DNO’s mandatory offer announcement, reiterated its stance that the 152p offer was not good enough.
It cited an independent expert GCA’s view which updated its analysis to reflect the current oil price environment and latest drilling results including for Brasse. ,
According to Faroe, 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.”
“The Board believes that GCA’s independent valuation further reinforces its view that the Offer is opportunistic and substantially undervalues Faroe,” Faroe said.
John Bentley, Non-Executive Chairman of Faroe, commented: “GCA’s independent valuation clearly supports our view that DNO’s Offer substantially undervalues Faroe. Its valuation of Faroe’s oil and gas assets implies a value per share for Faroe in the range of 186p to 225p per share representing a 22%-48% premium respectively to DNO’s Offer price.”
Offshore Energy Today Staff