Korea National Says $2.9 Billion Hostile Offer Fully Reflects Dana's Value
Kang Young Won, president and ceo of Korea National Oil Corp
SeongJoon Cho/Bloomberg
Kang Young Won, president and ceo of Korea National Oil Corp.
Kang Young Won, president and ceo of Korea National Oil Corp. Photographer: SeongJoon Cho/Bloomberg
Korea National Oil Corp. won’t raise its 1.87 billion-pound ($2.9 billion) hostile bid for Dana Petroleum Plc, Chief Executive Officer Kang Young Won said.
“Our offer fully and fairly reflects Dana’s value,” Kang told reporters during an oil industry conference in Seoul today.
The South Korean state-owned explorer’s 1,800 pence-a-share offer for Aberdeen, Scotland-based Dana is “final,” Korea National said in a separate statement today. The takeover code allows the price to be increased in the event of a competitive bid; with the recommendation of the target’s board; or if Dana announced any “material new information,” the company said.
The Financial Times reported Aug. 22 that Dana will make a final attempt this week to persuade Korea National to raise its offer in exchange for the approval of Dana’s board. When asked if he would consider such an approach, CEO Kang answered “no.”
Korea National said Aug. 20 it received letters of support from shareholders representing about 49 percent of Dana stock. The offer is a 59 percent premium over Dana’s closing price on June 30, the day before Dana said it had received an initial takeover approach. The shares are trading near a two-year high.
“There may be a sharp drop if Korea National walks away, and the shareholders won’t want that,” said Cho Seung Yeon, an analyst at HMC Investment Securities Co. “Korea National isn’t going to raise its offer because it’s got the support of major stakeholders, which puts it in a stronger position.”
Shareholders that have accepted the offer include Schroder Investment Management Ltd. as well as BlackRock Investment Management Ltd. and JPMorgan Asset Management, according to Korea National.
Shares Rise
Dana rose 4 pence, or 0.3 percent, to 1,803 pence at 10:30 a.m. in London, the highest since July 2, 2008. The shares have surged about 62 percent in six months compared with a 2.2 percent decline in the FTSE All-Share Index.
Korea National is tapping other companies for possible acquisitions as its seeks to increase output to about 300,000 barrels of oil equivalent a day by 2012 from 135,000 barrels now, Kang said today. The explorer has said it plans about $6 billion worth of acquisitions and projects this year.
In October Korea National agreed to buy Canada’s Harvest Energy Trust for $3.9 billion in the Asian nation’s biggest overseas energy acquisition after purchasing a stake in Petro- Tech Peruana SA of Peru for $450 million in February last year.
Bidder Confident
Korea National is confident its bid for Dana will be successful, Senior Executive Vice President Kim Seong Hoon said on the sidelines of the Asian NOC CEO Forum in Seoul today. The company hasn’t had any approach from Dana asking it to raise its offer, he said.
Dana, which focuses on the North Sea and Africa, said in March its proven and probable reserves rose 15 percent to 223 million barrels of oil equivalent in 2009.
With more than 100 interests in exploration and production licenses in nine countries, Dana pumps oil and gas from 37 fields. Dana drilled 17 exploration wells last year and produced an average of about 38,700 barrels of oil equivalent a day.
In June, the company agreed to buy Suncor Energy Inc.’s Dutch North Sea assets for 328 million euros ($415 million) in cash, its biggest purchase to date.
To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net
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