SKorea's KNOC wins hostile takeover of Dana Petroleum

24th September 2010, Comments 0 comments

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

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 owns or has received shareholder acceptances for around 64.26 percent of Dana shares.

The firm added that it has waived the 90-percent requirement for acceptances that it initially set and has 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.

A spokesman for Dana Petroleum, based in Aberdeen, northeastern Scotland, which serves the North Sea oil industry, declined to comment.

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 is seeking to acquire 75 percent or more ... so that Dana can be de-listed," a spokesman told AFP. "In that case the market value and liquidity of shares still held by shareholders will significantly decrease.

"We urge those shareholders who have not accepted the offer to do so immediately."

The Korean firm 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 regulatory 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.

"It would thus appear that management's efforts to hold out for a higher bid have failed," said Goodbody stockbrokers analyst Gerry Hennigan.

And Westhouse Securities energy analyst Peter Bassett added: "Despite resistance from Dana, KNOC has won the day, as we expected."

KNOC, which is fully owned by South Korea, is hoping to increase its production to 300,000 barrels per day in 2012, from 137,000 barrels currently, largely by acquiring overseas oil and gas assets.

© 2010 AFP

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