Norway’s DNO said it has offered to buy out Faroe Petroleum for 152 pence per share in cash, valuing the London-listed company at 607.9 million pounds ($779.81 million).
DNO, which already owns just over 28 percent of Faroe, began to build up stake in the Norway and UK-focused company earlier this year, sparking speculation of a take-over, which it denied. DNO company shifted its growth focus to the North Sea last year after years of expansion in the Middle East, mainly in Iraqi Kurdistan.
“The Offer Price represents a premium of 44.8 percent to Faroe’s share price of 105 pence at the close of business on 3 April 2018, the last business day before DNO announced its first acquisition of shares in Faroe,” DNO said.
Faroe’s shares closed at 125.8 pence on Friday, which gives the offer a 20.8 percent premium.
Bijan Mossavar-Rahmani, executive chairman of DNO said about the voluntary offer:
“For those shareholders who wish to exit, DNO is offering a considerable premium. For those who wish to remain, there is no assurance of Faroe achieving its full value potential in a volatile commodity and financial markets environment as a relatively small scale, financially constrained UK-AIM listed company whose share price performance has remained “stubbornly disappointing, with the very notable exception of short-term spikes following the sale of a particular large block of shares by one investor to another (most recently to DNO) and the attendant speculation about an impending takeover premium with each such transaction.”
He said whether the offer achieves DNO's minimum acquisition target or the acquisition of all of Faroe's shares, the company attach great importance to retaining the skills, knowledge and expertise of Faroe's operational management and employees. “We intend to retain Faroe's Aberdeen head office and each of the other offices."