KNOC goes hostile with its bid on Dana Petroleum

State-owned Korea National Oil Corporation (KNOC) today went hostile with its bid to acquire Dana Petroleum, after it secured the approval from 48.62 per cent of the UK-listed oil explorer's shareholders.

The Anyang, South Korea-based oil company said, ''KNOC has received letters of intent in support of its share offer from the holders of, in aggregate, approximately 48.62 per cent of interests in Dana shares.''

The bid values Dana at £1.87 billion ($2.91 billion) after KNOC raised its bid to £18 on 20 July after Dana announced that it has discovered new oil in Egypt.

Despite raising the offer, talks between both companies collapsed on 8 August, after Dana refused to open its books to the Koreans for due diligence, despite major Dana shareholders pressuring the company to open its books, saying that the Korean company's revised offer was fair. (See: Shareholders push Dana to discuss £1.7-bn takeover offer with KNOC)

Dana has seen its defences fast eroding as its stock price declined by as much as 13 per cent on 12 August after it rejected KNOC's revised offer, which made way for hedge funds to buy its shares at a big discount and shift the composition of the company's shareholding base.
Under the terms of KNOC's offer, Dana shareholders would receive £18 in cash for each share, a premium of 59 per cent to Dana closing on 30 June 2010-being the last business day prior to the date of KNOC making the offer.

"We believe that our offer of 1,800 pence per share fully and fairly reflects all of Dana's recently announced and ongoing developments, together with its exploration potential,'' said Dr. Seong-Hoon Kim, senior executive vice president of KNOC.