Tuesday 08 January 2019 5:56 pm | Updated: Monday 03 June 2019 2:41 am

DNO’s increased hostile bid could be enough says top Faroe shareholder

A new and increased offer for Faroe Petroleum could be enough for DNO to win its hostile bid against the wishes of the board, one of the target’s main shareholders has said.

Paul Mumford at Cavendish Asset Management, who in the past dismissed the bid, said he believed the new offer of 160p a share, an 8p increase, might be enough to win over the remaining 6.3 per cent of shareholders DNO needs to get a controlling stake.

“Unfortunately, this low-ball offer looks likely to succeed. DNO has already been buying in the market today, and if it continues tomorrow then we may see it reach a controlling stake in Faroe,” he said.

The new offer, which values the company at just under £642m, comes after shareholders holding 43.8 per cent of Faroe’s shares – including DNO’s approximately 30 per cent – accepted its offer.

“DNO does not overpay for assets. But we have listened to the market and believe it is in the interests of all parties, save perhaps for a handful of Faroe directors, to close off this process by increasing our Offer price to an even more generous level and announcing a final closing date,” DNO chairman Bijan Mossavar-Rahmani said.

DNO said shareholders have until 23 January to accept the bid, it already extended the offer period after the initial 2 January deadline.

“Among other considerations, we are mindful that this process may have been unsettling for Faroe employees and their families, and particularly so during the holiday season,” Mossavar-Rahmani said.