DNO keeps buying Faroe shares with no intention of making an offer

Norwegian oil and gas operator DNO ASA has increased its stake in UK-based Faroe Petroleum to 27.68 percent. 

DNO on Wednesday bought a 15.37% interest in Faroe Petroleum from Israeli firm Delek in a deal worth about £70 million. The acquisition covered all Faroe Petroleum ordinary shares held by Delek, totaling 56,355,825, at a price of GBP 1.25 per share.

The Israeli firm got rid of its stake in Faroe after less than a year and a half of buying it in a deal worth about £42 million.

Following the acquisition of Delek’s interest, DNO engaged Pareto Securities to acquire up to 10 percent of the outstanding shares in Faroe Petroleum through a reverse book building process, increasing its interest in the company to 25.37%.

In compliance with the takeover code, DNO said on Wednesday it did not intend to make an offer for Faroe Petroleum except with the agreement of the board of Faroe; if a third party announced a firm intention to make an offer for Faroe; if Faroe announced a “whitewash” proposal or a reverse takeover; and, if there has been a material change of circumstances.

Responding to DNO’s moves on Wednesday, Faroe said that its board considered that the GBP 1.25 per share price at which DNO purchased its shares from Delek “substantially undervalues the company and its prospects.”

Faroe also said that its board had not had any discussions with DNO related to its purchase of the shares in the company nor with Delek related to its sale of the shares.

After the two transactions on Wednesday, DNO on Thursday acquired further 8,487,838 shares in Faroe at a price of GBP 1.25 per share representing 2.32 percent of the outstanding shares in the company.

Following the three transactions, DNO will own 101,503,663 shares representing 27.68 percent of the outstanding shares in Faroe Petroleum.

Offshore Energy Today Staff