Energy Voice | DNO increases bid to take over Faroe Petroleum

Norwegian oil explorer DNO has increased its offer to acquire Aberdeen-based Faroe Petroleum.

The Oslo-listed firm has made a revised offer of £1.60 per share, up from an initial £1.52 tabled in November, and values the company at £641.7million.

Faroe’s board has argued the initial offer “significantly undervalues” the company.

Last week Faroe commissioned an independent report suggesting Faroe’s shares are worth between £1.86 and £2.25, which would still place this latest offer under that bracket.

Since then, DNO has increased its shares in Faroe to 30% triggering a “mandatory offer” for the company.

This reduces the number of shareholders that need to accept the offer from 57.5% to 50%, and will close art 1pm on January 18.

The two companies have been embroiled in a war of words since the hostile takeover bid was announced, with DNO making repeated criticisms of Faroe’s board.

Yesterday the company pressed Faroe for “transparent and timely” operational updates following “three unsuccessful” exploration wells being drilled by Faroe.

DNO has also described Faroe’s recent asset swap deal with Equinor, involving stakes in several Norwegian oilfields, as further evidence of the firm’s “inability to capitalise fully on its assets”.

In a recent interview with Energy Voice, Faroe CEO Graham Stewart described the criticisms as “unfounded” and a bid to damage the reputation of the board and its support from shareholders.

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