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Dana accepts defeat in South Korean £1.67billion takeover

Dana accepts defeat in South Korean £1.67billion takeover
South Korea's national oil company KNOC said yesterday it had taken control of Aberdeen oil and gas operator Dana Petroleum, whose board had accepted defeat in the hostile takeover.

South Korea’s national oil company KNOC said yesterday it had taken control of Aberdeen oil and gas operator Dana Petroleum, whose board had accepted defeat in the hostile takeover.

KNOC said it was declaring its offer wholly unconditional after it gained 64.26% of Dana’s shares by the first closing date for acceptances on Thursday, and said it was waiving an earlier condition requiring acceptances for 90% of shares.

The deal is worth £1.67billion, or £18 a share in cash, to Dana shareholders and a total of £1.87billion including Dana’s convertible bondholders. Dana’s shares closed yesterday at £17.98.

Dana said yesterday its directors were now reluctantly recommending the offer, which previously they have resisted, saying they valued Dana at considerably more.

The directors said they recognised there were risks to shareholders if the company was de-listed as KNOC planned, and they intended to accept the offer in respect of their own holdings.

The offer will now be extended until further notice. KNOC needs acceptances for 75% of shares before it can de-list Dana from the London Stock Exchange and 90% before it can compulsorily acquire the remaining shares.

Tom Cross, Dana’s chief executive, said: “Dana has become a very strong and growing exploration and production business with interests in more than 100 production and exploration licences, over nine countries.

“We will work closely with KNOC to ensure all our production, development and exploration projects continue to move forward to maximise the economic benefits for all stakeholders, including KNOC, our industrial partners and the host governments with which we work.

“I believe that the business will continue to flourish under KNOC’s ownership.”

David Barclay, of investment manager and financial specialist Brewin Dolphin in Aberdeen, noted that Dana’s board had no choice but to capitulate and recommend the bid to shareholders.

He said that with KNOC now exerting effective control, it would look to sweep up minority shareholders and another landmark Aberdeen-based firm would be de-listed – around 12 months after Venture Production was acquired by Centrica.

KNOC’s takeover of Dana, which became hostile in August, represents the first time an Asian state-owned company has ever proceeded with an unsolicited bid.

Its interest in Dana is part of a drive to snap up foreign energy resources and secure future energy supplies for South Korea, which at present is heavily dependent on imports from other countries.

At the end of 2009, Dana reported proven and probable reserves of 223million barrels of oil equivalent, and it has since added more reserves through the £240million acquisition of assets from Petro-Canada UK.

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