Dana will be sold at £1.9bn, market says

INVESTORS and analysts said it was “game over” for Dana Petroleum last night after the state-owned Korea National Oil Corporation (KNOC) stuck with its £1.9bn takeover offer.

KNOC called Dana’s bluff a day after the Aberdeen-based exploration company put out a defence document arguing for a much higher offer. Dana, led by pugnacious chief executive Tom Cross, had put the case for a bid of between £22.70 and £24.65 per share based on an independent valuation of its pipeline projects.

But KNOC yesterday refused to raise its £18 per share approach. Emboldened by the absence of a counter-bidder, the Far Eastern sovereign firm gave shareholders until 23 September to accept its offer.

It added: “KNOC does not require the support of the board of Dana to proceed with this transaction.”

Dana shares fell 1.3 per cent to £17.85 as the market assumed a done deal at £18 per share. Investors, some of whom have been irked by Cross’ dogged refusal to engage with KNOC, said the Koreans were close to victory.

One told City A.M.: “If 31 per cent of the shares are in the hands of arbs [hedge funds] and they tender their stock – which we intend to do too – it’ll quickly be more than 51 per cent and it’s game over for Dana.”

Keith Morris at Evolution Securities said the market’s reaction pointed to a successful hostile buyout but suggested Cross would fight to the end. “He won’t give up easily,” Morris said.