U.K.-based producer Faroe Petroleum PLC announced Jan. 9 that its board of directors received a revised unsolicited offer of 160 pence per share from Norway-based oil producer DNO ASA, despite the former's release of a higher independent valuation report.
DNO will own about 195.6 million shares, or 52.44%, of Faroe from current holdings and received acceptances.
DNO estimates Faroe's existing shares at about £641.7 million, DNO said in the final offer released Jan. 9. Faroe earlier released a report from Gaffney Cline & Associates that valued its assets at about US$879 million to US$1.08 billion, or 186 pence to 225 pence per share, which is 22% to 48% higher than DNO's original offer of 152 pence per share in cash.
Under the new offer, about £402 million will be paid to the remaining Faroe shareholders, while £53 million will be paid to Faroe directors, management and employees. The initial offer was for the purchase of 49 million shares, about 13.1% of Faroe's existing share capital.
Faroe advised its shareholders to sell and accept the final offer following the board's decision. The final offer will remain open until Jan. 23 but DNO could extend it.
The U.K.-based company disclosed that DNO plans to delist the company if the acceptance level reaches 75% and will implement changes to Faroe's board of directors.
Faroe reiterated that the final offer does not represent fair value but said it will be unconditional upon the settlement of share purchases.
DNO also acquired 373,000 Faroe shares Jan. 3, which hiked its stake in the company to 30%.