Norwegian oil company DNO ASA raised its bid for Britain's Faroe Petroleum to 641.7 million pounds (US$816 million) on Jan. 8, lifting its cash offer to 160 pence per share from 152 pence.
Shares in Faroe, which rejected DNO's 610 million pound hostile bid in November as inadequate and "opportunistic", have since ranged between 140 pence and 160.8 pence.
DNO's Chairman Bijan Mossavar-Rahmani said in a statement that while the company "does not overpay for assets," it was in the interest of most parties to raise its offer.
RELATED: DNO Adds To Faroe Petroleum Stake In Hostile Takeover Saga
The deal will be funded from cash resources and the closing date for the final offer has been set for Jan. 23, DNO said.
DNO, which has been building up a stake in Faroe since April, said its combined ownership and bid acceptances on Jan. 4 stood at 43.8%. It requires 50% of Faroe's shareholders to back its takeover bid.
Faroe had no immediate comment after DNO raised its offer.
Paul Mumford of Cavendish Asset Management, who according to Refinitiv Eikon data holds 1.4% of Faroe and who has said DNO's previous offer was too low, said Jan. 8 that the revised offer—which he also referred to as "low-ball"—looked likely to succeed.
"For minority shareholders this may be the nail in the coffin. They are unlikely to want to stick around with DNO holding a controlling stake in the business," he said.
Analyst Teodor Sveen-Nilsen of broker Sparebank 1 Markets in Oslo said he expected the increased offer to be successful.
"Considering the fact that peers have become cheaper over the past quarter..., we believe DNO now will end up with at least 50% of Faroe's share capital," he said in a note. (US$1 = 0.7863 pounds)
Recommended Reading
Santos’ Pikka Phase 1 in Alaska to Deliver First Oil by 2026
2024-04-18 - Australia's Santos expects first oil to flow from the 80,000 bbl/d Pikka Phase 1 project in Alaska by 2026, diversifying Santos' portfolio and reducing geographic concentration risk.
Iraq to Seek Bids for Oil, Gas Contracts April 27
2024-04-18 - Iraq will auction 30 new oil and gas projects in two licensing rounds distributed across the country.
Vår Energi Hits Oil with Ringhorne North
2024-04-17 - Vår Energi’s North Sea discovery de-risks drilling prospects in the area and could be tied back to Balder area infrastructure.
Tethys Oil Releases March Production Results
2024-04-17 - Tethys Oil said the official selling price of its Oman Export Blend oil was $78.75/bbl.
Exxon Mobil Guyana Awards Two Contracts for its Whiptail Project
2024-04-16 - Exxon Mobil Guyana awarded Strohm and TechnipFMC with contracts for its Whiptail Project located offshore in Guyana’s Stabroek Block.