Faroe’s future hangs in balance as DNO offer deadline passes

Graham Stewart, chief executive of Faroe Petroleum, will leave the firm within three months.
Graham Stewart, chief executive of Faroe Petroleum, will leave the firm within three months.

Faroe Petroleum’s future was hanging in the balance tonight after the deadline passed for a “hostile” takeover offer for the Aberdeen-headquartered oil firm.

Norwegian company DNO set a closing date of 1pm on January 2 for Faroe shareholders to accept the its deal, which has led to an increasingly bitter row between both companies.

The offer was conditional upon DNO’s ability to secure enough acceptances to take its equity in Faroe to 57.5%.

But Oslo-based DNO has still not revealed whether it had convinced enough investors to part with their Faroe shares.

DNO does have an option to extend or “lapse” the offer by a year if it falls short.

Faroe chief executive and founder Graham Stewart was left battling to preserve the company’s independence.

This morning, Faroe published a new, independent report suggesting it was worth £1.86-£2.25 per share.

In November, DNO tabled an offer of £1.52 per share for the remaining equity in Faroe, having earlier raised its stake to 28.2%.

Its bid represented a premium of 21% on Faroe’s share price the previous day.

Faroe bosses urged investors to snub the “low-ball” offer and accused DNO of trying to take advantage of the recent drop in oil prices.

DNO repeatedly insisted its prosposal was “full and fair” and an opportunity to exit a company which had “failed to deliver consistent shareholder returns”.

DNO also vowed to retain Faroe’s Granite City head office, saying it attached great importance to the “knowledge and expertise” of company’s employees.

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