DANA Petroleum’s embattled board came under fresh fire from shareholders and City analysts yesterday as it dug in its heels against a £18-a-share takeover bid from rival Korea National Oil Corporation (KNOC).
Dana said bid talks had stalled after KNOC “failed to recognise the value of the company’s recent developments and work in progress”.
The move leaves the future of the tie-up teetering perilously on the brink, with KNOC mulling whether to walk away or go hostile. The Korean firm is thought to be unlikely to raise its already-sweetened offer, given it has the support of many of its target’s shareholders. Dana has faced growing pressure in recent weeks from investors, including its largest shareholder Schroders, to come to the table at a level of £18, which many believe represents fair value for the shares.
Its rejection of the offer yesterday leaves Dana’s suitor “considering its options”, KNOC said, reiterating that it believes that the £18-a-share offer “fully and fairly reflects all of the company’s recently announced and ongoing developments, together with its exploration potential”.
Dana argued yesterday that it had offered to open up its books to KNOC to start due diligence, blaming its rival for jeopardising the process by refusing to sign a non-disclosure agreement (NDA). But critics of Dana’s chief executive Tom Cross remained staunchly unsympathetic to the company’s position, with one fund manager saying that KNOC would be perfectly entitled to refuse, given that such a move often precludes a company from subsequently launching a hostile bid.
Dana’s shares initially tanked 12 per cent before finally closing just 3.72 per cent lower at £14.90 yesterday.