SKorea's KNOC clinches Dana Petroleum takeover

24th September 2010, Comments 0 comments

South Korea's state-owned Korea National Oil Corporation on Friday sealed a hostile takeover of Dana Petroleum after securing 64-percent support from the British oil explorer's investors.

The news comes one month after KNOC launched a hostile bid for the group, which has operations in Europe and North Africa, for 1.87 billion pounds (2.3 billion euros, 2.9 billion dollars) or 1,800 pence per share.

South Korea, which must import virtually all its energy needs, has been moving more aggressively to secure stable overseas supplies in the face of competition from its giant neighbour China and other emerging market countries.

KNOC said in a statement that it now owned or had received shareholder acceptances for around 64.26 percent of Dana shares.

The firm added that it had waived the 90-percent requirement for acceptances that it initially set and had extended the offer until further notice.

As a result, the company declared the bid "unconditional" -- meaning that all of its takeover conditions had been met.

"KNOC is ... pleased to announce that the share offer has become unconditional as to acceptances," it said.

In reaction, Dana Petroleum admitted defeat and recommended that all of its shareholders now accept the offer, which it had previously rejected.

"Today we are reluctantly recommending that shareholders accept KNOC's offer because we believe that this is now in the best interests of the significant number of Dana shareholders who have supported the company and not yet accepted," said Dana chairman Colin Goodall.

Dana Petroleum is based in Aberdeen, northeastern Scotland, which serves the North Sea oil industry.

The Korean state-owned company plans to de-list Dana from the stockmarket once it reaches 75 percent and added that it will automatically buy the remaining stock once it reaches the 90-percent acceptance level.

KNOC made its first approach to Dana in July and launched its hostile offer on August 20 after the pair failed to agree on a price.

British competition authorities gave the deal the green light on Thursday, removing a potential obstacle.

KNOC acquired a 50 percent stake in Peru's Petro-Tech Peruana for 450 million dollars in February 2009 and bought Canda's Harvest Energy Trust for 3.9 billion dollars last October.

But it lost out to Chinese state firm Sinopec in the competition for Switzerland-based Addax Petroleum last year.

Earlier this month, Dana released a lengthy document outlining its growth strategy and suggesting a considerably higher valuation was justified.

The British group argued that the bid "substantially undervalues Dana" and management unanimously recommended that shareholders reject the KNOC offer.

However, KNOC refused to raise its bid for Dana, which has interests in 36 producing oil and gas fields, including in Egypt and the North Sea.

© 2010 AFP

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