PETROLEUM is braced for a £1.9bn hostile takeover by Korean National Oil Corps after investors dismissed an ambitious defence document demanding a higher price.
Shares in Dana closed almost flat at £18.09, just above the level of state-owned KNOC’s £18 per share offer, indicating shareholders were unmoved by the argument. The board of the Aberdeen-based oil and gas explorer said the company was worth between £21.10 and £24.65 per share based on the valuation of an independent expert. Dana also announced the much-trailed purchase of North Sea assets from Canada’s Suncor for £240m, which it said contributed to the uplift.
Chairman Colin Goodall again called on investors to reject the approach from the Far Eastern predator. He said: “For a national oil company to launch a hostile offer without access to detailed technical information means KNOC must be highly confident the Dana assets are worth much more than the offer price.”
But City insiders disagreed, noting that KNOC already had letters of indicative support from shareholders accounting for 49 per cent of Dana’s shares. Analysts expected KNOC to begin buying the stock with a view to a hostile takeover.
David Hart at Westhouse Securities said: “My gut feeling is they could stick by their £18-per-share offer and do it, but whether they decide to go down the path of least resistance and raise the bid slightly I don’t know. On balance, it’s more likely to go hostile.”
Analysts at JPMorgan said £18 per share “represents a good price for this stock”. Citigroup agreed and pointed out the absence of “white knight” bidders to help Dana fight for a raise.
DANA?PETROLEUM?has hired RBS?Hoare Govett, RBC Capital Markets and Morgan Stanley to defend against the Koreans’ siege.
Leading the team at RBS Hoare?Govett is John MacGowan. MacGowan has had a busy summer, advising Dana on its £270m purchase of Dutch oil company Petro Canada Netherlands in?June and guiding industrial group BSS?on its purchase by Travis Perkins.
He is joined by Stephen Bowler, a veteran broker who has worked on a number of transactions including the £350m fundraising by private equity lender Intermediate Capital Group last year. Also on board for RBS?Hoare Govett is Graham Hertrich.
Dana’s other advisers include RBC Capital Markets’ Josh?Critchley, who worked with?Resolution on its recent acquisition of Axa’s UK life and pensions business, and Andrew Foster of Morgan Stanley.
On the KNOC side is Bank of America Merrill?Lynch. Andrew Osborne, a Hoare Govett alumnus, is a key player, as are bank chairman Simon Mackenzie-Smith, Philip Noblet and Anya Weaving. For Noblet, a successful deal would cap a good month. He was made co-head of?M&A for Europe and the Middle East this week.