DNO ASA, a Norwegian oil and gas operator focused on the Middle East, said it has withdrawn its request to Faroe Petroleum for a shareholder meeting regarding board representation in a sign of escalating conflict.
DNO, top shareholder of London-listed Faroe, had asked for an extraordinary general meeting (EGM) of shareholders to be held to put two of its executives on the board. Faroe responded by asking shareholders to vote against the said proposal.
“DNO ASA withdraws the request… to consider its representation on Faroe Petroleum plc's board of directors and notes with deep disappointment Faroe Petroleum's repeated peremptory and disdainful attitude to such representation for, and therefore greater engagement with, its largest shareholder,” the company said in a statement.
DNO said it had also sought to raise “concerns and dismay” over Faroe’s wider governance culture and shareholder value strategies, and that it would now “consider its position”.
Earlier this year, DNO increased its stake in Faroe to 28.23 per cent, triggering speculation about a full takeover, which it has denied.
Faroe earlier in August said representation of Bijan Mossavar-Rahmani, executive chairman of DNO, and Bjørn Dale, managing director of DNO to its board would cause conflict of interest as both companies have business on the Norwegian Continental Shelf.
The appointments would also be inconsistent with its principle of the board being independent, and that it would not serve the interest of other shareholders in Faroe or the company as a whole, the statement on August 16 had said.
Additionally, Faroe said that a “significant number of Faroe’s major institutional shareholders have provided clear guidance” that they do not want DNO to be represented on the board.
“The Board believes that the proposed resolutions are wholly self-serving and are part of an undisclosed strategy on DNO and Mossavar-Rahmani’s part to try and gain control of Faroe’s business without making an offer to all shareholders at an appropriate premium,” Faroe added.