Faroe Petroleum rebuffs DNO offer again, urges shareholders to reject it

20th Dec 2018 11:13

(Sharecast News) - Faroe Petroleum once again rejected an offer from Norwegian oil producer DNO on Thursday, dismissing it as "opportunistic" and urging its shareholders to do nothing. The company reiterated previous statements that the 152p a share offer substantially undervalues the group's "high quality, full cycle and diversified North Sea business".Faroe also reiterated that the offer from DNO, which already owns a 28.5% stake in the company, represents a premium of only 21% to the closing share price prior to the announcement, which is about half the average premium paid on all UK takeovers over the last 10 years.Non-executive chairman John Bentley said: "We have one of the best exploration track records on the Norwegian Continental Shelf and are currently in the midst of the largest drilling campaign in Faroe's history. We are fully funded to deliver our 35,000 barrels of oil equivalent per day production target in the near-to-medium term and are confident in our ability to deliver in excess of 50,000 boepd in the medium term."We have an excellent track record of actively managing our portfolio as demonstrated most recently by the Equinor asset swap which will add £96m incremental cash flow in the next two years. DNO were not aware of this transaction when they announced their offer and have since then failed to revise their offer to reflect the significant benefits created by it."Your board unanimously recommends that you should reject the offer." At 1125 GMT, Faroe shares were down 0.2% to 151.88p.