Dana Petroleum, KNOC Plan Meeting To Discuss Bid - Sources

2nd Aug 2010 15:15

By Marietta Cauchi and Sarah Kent Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. oil exploration and production company Dana Petroleum PLC (DNX.LN) and Korea National Oil Corp. have agreed to meet in an attempt to progress bid talks which are in danger of stalling amid attempts by Dana's chief executive Thomas Cross to improve on KNOC's 1,800 pence-a-share approach last month, people familiar with the situation told Dow Jones Newswires Monday. The parties have agreed to meet to discuss the proposal, one person said. The time and venue have yet to be confirmed but earlier press reports suggested that it could take place as early as this week. Cross together with Dana's chairman, Colin Goodall, are likely to attend. It is unclear who would attend from state-run KNOC. Cross has spent the last few weeks trying to convince shareholders to hold out for a better deal than the GBP1.67 billion offer from KNOC, which he says undervalues the company. Cross has indicated that he has concerns about financing for the bid and that a better deal might be possible. But many investors including some of the larger shareholders such as Schroders PLC (SDR.LN) remain unconvinced and think that the offer should be accepted. Analysts agree with the shareholders and regard the offer as a fair one. "The lack of negotiations so far suggests that Dana's Board want KNOC to pay for the exploration upside in the portfolio which is at odds with historic acquisitions made by KNOC which paid decent cashflow multiples but little for exploration," Evolution Securities said in a note Monday. "We continue to believe that GBP18/share is a very healthy offer and is unlikely to be raised by KNOC," Evolution added. Shares in Dana have jumped since the company received KNOC's initial 1,700 pence-a-share indicative approach June 17. They reached a 52-week high of 1,728 pence after KNOC revised its offer, which remains conditional on the Korean company gaining access to Dana's books and a recommendation from Dana's board. At 1413 GMT shares in the Aberdeen-based company were up 9 pence, or 0.5%, at 1720 pence, compared with a 3.2% rise in London's oil and gas index. -By Marietta Cauchi and Sarah Kent, Dow Jones Newswires; +44 207 842 9241; [email protected] (END) Dow Jones Newswires August 02, 2010 10:15 ET (14:15 GMT)