Azernews.Az

SEOUL/LONDON – Korea National Oil Corp looked closer to securing the 1.67bn pounds hostile takeover of oil firm Dana Petroleum after investors accepted it was not budging on price.

Dana shares fell on Thursday below the 1,800 pence value of KNOC's offer for the first time since August 24 after KNOC ruled out improving its offer even if Dana's board were to recommend its bid, crushing investor hopes of a higher offer.

"The market above 1,800 pence was hoping that Dana could eke out another 25 or 50 pence for a board recommendation. KNOC have basically kicked that into touch," said Oriel analyst Richard Rose. "We think at 1,800 pence investors are going to take it and it will go."

Dana's shareholders have until September 23 to accept the offer after state-run KNOC went straight to Dana investors following Dana's rejection of the offer. In August, KNOC said it had received the backing of nearly 49 percent of shareholders.

Since receiving the takeover approach, Dana has seen hedge funds such as Jabre Capital build up stakes, wagering the Korean's thirst for resources will prevail over rebuffs from Dana's Chief Executive Tom Cross, who owns a 2.2 percent stake.

KNOC needs acceptances from 75 percent of shareholders before it can delist Dana from the London Stock Exchange and 90 percent before it can begin a squeeze out process.

Full and final
KNOC said its view on Dana's value had not been altered by Dana's defence document and its announcement of an acquisition of North Sea assets on Wednesday.

KNOC noted that Dana's reserves had been downgraded during the first half of 2010, questioned the company's assertions on how much value the recent acquisition would add and said it believed its offer reflects Dana's exploration programme.

"KNOC's share offer of 1,800 pence per Dana Share is full and final and will not be increased save that KNOC reserves its right to increase the Share Offer if a competitive situation arises," said KNOC in a statement.

Shares in Dana were down 1.1 percent to 1,789 pence at 10:58 a.m. British time, underperforming Britain's mid-cap index of companies .FTMC which was up 0.6 percent.

Analysts said Dana's management had been waiting for the first results from its key Anne Marie well in the Faroe Islands, due in the next week to ten days, believing a positive result from the well could have encouraged KNOC to raise its bid, a circumstance now ruled out by KNOC.

Korea gave KNOC a $6.5bn war chest this year to compete with energy-hungry Asian state firms looking to secure supplies for their growing economies.

The company has a target to raise the nation's production capacity to 300,000 barrels per day (bpd) by 2012 from 130,000 bpd in December.

Chinese and Indian firms have so far outgunned KNOC, which explores and stores oil, in bigger merger and acquisition battles.