Calvalley Petroleum Falls After DNO Drops Takeover Offer

Calvalley Petroleum Inc., a company that explores for oil and natural gas in Ethiopia and Yemen, fell the most in more than four months after DNO International ASA dropped its bid to buy the company.

Calvalley fell 17 percent to C$2.12 at the close in Toronto, the most since Feb. 14.

DNO said today it won’t proceed with its all-cash bid to buy Calvalley at C$2.30 for each Class A share, or about C$216.9 million. Calvalley’s board is considering it options after a partner in its Yemen project announced the potential sale of a 25 percent stake, said Oslo-based DNO, which announced its offer on July 5.

Calvalley said late yesterday it was forming a special committee to explore strategic alternatives and its board has adopted a so-called poison pill to protect against unsolicited takeover bids.