Faroe Petroleum’s board has relented to DNO final offer to take over the UK independent firm after DNO upped its offer to value the Faroe at £641.7million and increased its hold of shares to to 52.44 per cent, making the offer unconditional.
Over the last month Faroe Petroleum’s board has resisted the takeover bid from DNO saying that the initial offers had not offered fair value.
In the board’s press release accepting defeat Faroe said: “Whilst the Board does not believe the Final Offer represents fair value, the Board recognises that, as set out above, the Offer will be declared wholly unconditional upon settlement of the further share purchases made by DNO and DNO will therefore acquire statutory control of Faroe.”
DNO increased its bid to £1.60 per share, up from the £1.52 offer tabled in November. Faroe said it expects DNO’s final offer will remain open for an additional 14 days, now closing on February 6, as it becomes “unconditional” under UK takeover code.
In a statement, Faroe said that if DNO acquires 75 per cent of Faroe shares, DNO intends to delist the company from the London Stock Exchange, reducing the marketability of Faroe’s shares.
“The Board also notes that DNO has indicated that it expects to make changes to the Faroe Board and the Board therefore considers there to be no assurance that Faroe would continue to maintain its current corporate governance culture in line with UK corporate governance best practice.”
Faroe added: “The board now recommends that, given the final offer will become wholly unconditional, shareholders should accept the final offer, as Faroe directors intend to do in respect of their own beneficial holdings. The board intends to work with DNO in the interim period to ensure an orderly transition of control of the company in the interests of all our stakeholders, including our shareholders and employees.”