LONDON (Alliance News) - Norwegian oil & gas firm DNO ASA on Tuesday increased its final cash offer for Faroe Petroleum PLC to 160 pence per share from 152p and criticised Faroe's management amid the hostile takeover approach.
Shares in Faroe closed up 3.2% at 160.00 pence on Tuesday.
The increased offer values Faroe's share capital at approximately GBP641.7 million. The final closing date for the offer has also been extended to January 23 from January 18, a second extension from its original deadline of December 31.
"DNO does not overpay for assets. But we have listened to the market and believe it is in the interests of all parties, save perhaps for a handful of Faroe directors, to close off this process by increasing our offer price to an even more generous level and announcing a final closing date," said DNO Executive Chair Bijan Mossavar-Rahmani.
"As for the Faroe directors who persist with their 'do nothing' stance, we expect to issue a request for an extraordinary general meeting of shareholders to make appropriate changes to the board in an overdue effort to introduce proper corporate governance and instil a culture of value creation for all shareholders. We fully intend to protect our already sizeable investment in Faroe and set the company on a strong growth track following a series of serious commercial setbacks," Mossavar-Rahman added.
DNO said that while it would prefer to achieve its 50% acceptance level and acquire additional shares, its is comfortable with the possibility of a lapsed offer and a less than majority holding.
Earlier in the day, DNO said that a reserves downgrade at Faroe Petroleum's Oda field by Norwegian Petroleum Directorate raised concerns over Faroe's future expected production profile and should have been reflected in the UK company's independent expert report.
DNO said the Norwegian Petroleum Directorate downgraded reserves at Oda field by 30% to 32.7 million barrels of oil equivalent, while Faroe's independent experts asset valuation report published last Wednesday provided a 47.8 million figure for Oda's gross proven and probable reserves and made no reference to the downgrade.
Faroe has 15% interest in Oda field.
DNO urged Faroe's board to provide transparent and timely operations updates to shareholders.
Last Friday, DNO further increased its stake in the UK listed oil and gas company to 30.6% by buying further 2.8 million Faroe shares on Thursday at prices ranging between 147 pence and 152p per share.
Taken together with acceptances of its 152p per share takeover offer for Faroe, DNO is interested in 43.8% of Faroe's issued share capital. As of last Wednesday, DNO had received valid acceptances in respect of 13.1% of the issued share capital of Faroe, excluding its own holding.
