Norwegian energy firm DNO has warned takeover target Faroe Petroleum that it will not give up its pursuit of the North Sea oil producer.
DNO, which is pursuing a £608 million hostile takeover of Faroe, gained the backing of just 13% of investors for the deal on Wednesday.
But on Thursday the group triggered a mandatory offer by taking its own stake in Faroe to the 30% threshold.
In doing so, chairman Bijan Mossavar-Rahmani said: “DNO is not going away.
“Even if DNO’s offer lapses or is allowed to lapse, DNO is not going away. For too long shareholders have given the Faroe board of directors a free pass.
“Starting with our first acquisition of shares, shareholders holding some 43% of Faroe’s shares have voted with their feet by seeking to exit all or part of their positions either through sales to DNO or by accepting our offer.
“Whatever the outcome of this offer process, we will make every effort, through regular communication and engagement, to encourage our fellow shareholders who remain invested to vote their shares going forward not by proxy but proactively.”
Faroe said DNO’s 152p per share offer is “opportunistic” and substantially undervalues the company.
It also said DNO’s increasing attacks on Faroe’s exploration record and implied criticism of technical team is “puzzling”.
Faroe shares were up 4.7% at 153p in afternoon trade.
To succeed in its pursuit, DNO requires more than 57.5% of investors to back the deal. Given it now owns over 30% of Faroe itself, the Norwegian firm has overall support from 43.1% of the investor base.
DNO said its mandatory offer has been further extended in accordance with takeover rules to January 18.
Earlier this week, Faroe hired industry experts at Gaffney, Cline & Associates to come up with their own valuation of the company, which concluded that its assets are valued in the range of 186p to 225p per share, or between 879 million US dollars (£688 million) and 1.1 billion US dollars (£862 million).
