Connect with us

Hi, what are you looking for?

Capital Business
Capital Business


KNOC launches hostile bid for Dana Petroleum

LONDON, Aug 20 – State-owned Korea National Oil Corporation on Friday launched a hostile takeover bid for Dana Petroleum, valuing the British oil explorer at 1.87 billion pounds (2.3 billion euros, 2.9 billion dollars).

The South Korean company said it has already won the support of nearly half of Dana\’s shareholders — and is now taking its 1,800-pence-per-share takeover bid directly to investors after failing to secure management backing.

The development marks the first time that a state-owned Asian oil firm has launched a hostile takeover of a British company and comes amid a flurry of global mergers and acquisitions activity in recent days.

"KNOC today announces the terms of a cash offer to be made for the entire issued and to be issued ordinary share capital of Dana," the group said, adding that 48.62 percent of investors already backed the bid.

Dana, based in Aberdeen, northeastern Scotland, has interests in 36 producing oil and gas fields, including operations in Egypt and the North Sea.

KNOC originally offered 1,700 pence per share and then raised it to 1,800 pence — but Dana management rejected the offer on August 12.

In reaction to the latest news, Dana\’s share price rallied 5.60 percent to 1,790 pence in late morning London deals.
"We believe that our offer … fully and fairly reflects all of Dana\’s recently announced and ongoing developments, together with its exploration potential," said Dr. Seong-Hoon Kim, senior executive vice president of KNOC.

KNOC, which is trying to explore and secure energy sources to meet South Korea\’s growing demand, expressed disappointment at failing to reach a friendly takeover deal.

"It has always been our desire to agree a recommended transaction with the board of Dana," KNOC said on Friday.
"We are very disappointed the board of Dana does not agree that 1,800 pence per share represents a full and fair value for the company."

The cash bid represents a 59 percent premium to Dana\’s closing share price on June 30, the day before KNOC\’s approach was revealed.

Advertisement. Scroll to continue reading.

Analyst Job Langbroek at Davy Stockbrokers in Dublin said KNOC was keen to expand its asset base.

"The widespread interests of Dana, with producing projects in the UK and Norwegian sectors of the North Sea as well as Egypt, are attractive to KNOC as it seeks to meet its mandate of securing oil and gas assets for the Korean state," Langbroek said in a note.

"The offer and its tacit acceptance by nearly half of the existing shareholders in Dana will make it hard for the Dana management team to rebuff the Korean attention."

South Korea becomes the latest Asian nation to seek expansion in the energy sector to meet booming demand.

Last year, Chinese state-owned firm Sinopec bought Addax Petroleum for 7.2 billion dollars as the Asian powerhouse sought to secure more overseas energy assets.

Switzerland-based Addax, which was listed in London and Toronto, focuses on energy exploration in Africa and the Middle East.

The Dana takeover bid, meanwhile, marks the end of a fast-moving week for global takeover activity.

On Wednesday, Anglo-Australian mining giant BHP Billiton launched a mammoth hostile bid for Canada\’s Potash Corp which valued the world\’s largest fertiliser producer at 40 billion dollars.

On Thursday, US computer chip giant Intel agreed to buy Internet security firm McAfee for 7.68 billion dollars.
A week ago, London-listed miner Vedanta Resources said it would take a majority stake in energy explorer Cairn India for up to 9.6 billion dollars.

Advertisement. Scroll to continue reading.
Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...