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 (2.9 billion dollars, 2.4 billion euros).
The South Korean company 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.
"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.
|File picture showing an oil rig in the North Sea.|
The firm 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 5.72 percent to 1,792 pence in London morning 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.
Dana, based in Aberdeen, northeastern Scotland, has interests in 36 producing oil and gas fields, including operations in Egypt and the North Sea.
State-owned KNOC, which is trying to explore and secure energy sources to meet South Korea's growing energy 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.
Analyst Job Langbroek at Davy Stockbrokers in Dublin said state-owned 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."
The Dana takeover bid marks the end of a fast-moving week for global mergers and acquisitions (M&A).
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.
One 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.