Shareholders in Dana Petroleum are attempting to force the UK-based oil explorer to open takeover talks with South Korean suitor Korea National Oil Corp (KNOC), according to reports.
The Financial Times has reported that Schroders, Dana's biggest shareholder with a 13 per cent stake, has urged its board to engage with KNOC over its £1.67 billion indicative offer.
It is thought that BlackRock and JPMorgan Asset Management, Dana's second and third biggest investors, have backed Schroders' call for formal takeover talks. A group of hedge funds is also believed to be pushing for a deal.
Shareholders in the Aberdeen-based company are said to beconcerned that Dana’s management may be holding out for an unrealistic price.
Dana responded to KNOC’s offer by telling shareholders to take no action, saying the South Korean company had failed to clarify questions on its potential financing.Dana said it would only be prepared to give KNOC access to due diligence once it has been given assurances on financing.
KNOC, which lost out to China’s largest oil refiner Sinopec in a deal for the Swiss oil explorer Addax Petroleum in 2009, is yet to make an acquisition this year. The company has never carried out a deal before in the UK. Previous failed acquisition attempts include Imperial Energy UK.
However, the state-owned company has confirmed that it has a substantial war chest to spend on deals as part of its strategy to double South Korea’s oil reserves.
Shares in Dana on Friday shot up almost 14 per cent following news of KNOC’s offer.
Dana’s chief executive Tom Cross stands to make around £33.3 million from his two per cent stake in the company if it is sold.
Dana currently produces from 36 oil and gas fields across four countries and holds more than 80 interests in exploration and production licences spanning eight countries. Dana’s activities are focused within its two core areas of Europe (North Sea) and Africa (North & West).
In Africa, Dana has production, development and exploration interests across Egypt, oil and gas discoveries offshore Mauritania and Morocco, and additional exploration opportunities offshore Senegal.
In Europe, Dana’s producing interests are focused on oil and gas in the UK North Sea, oil offshore Norway and gas offshore The Netherlands. Dana also has significant development and exploration opportunities across the North Sea.
