Norwegians to fight on in battle for oil explorer
THE battle for North Sea oil company Faroe Petroleum is not over yet, and shareholders are reaping the benefit.
DNO, the predatory Norwegian firm which wants to buy Faroe for £608m in a hostile takeover, failed to win enough support for the deal from shareholders on Wednesday.
But instead of backing down, DNO, which already owned 29.9pc of Faroe, has started buying up more shares in the AIM-listed company. This means the Norwegian giant now owns more than 30pc of Faroe, triggering a socalled mandatory takeover offer.
DNO can now buy more shares, but only at its offer price of 152p. If it manages to push its holding to 50pc, it will have a controlling stake in the company and could shake up the board with a view to pushing its takeover through.
Knowing that there is a keen buyer in the market encouraged trading in Faroe’s shares, lifting them 4.9pc, or 7.2p, to 153.2p.
Faroe has repeatedly claimed that the company is worth more than DNO’s offer, and released an independent report by Gaffney, Cline & Associates earlier this week that put its value at as much as £848m.
DNO now has until January 18 to reach the 50pc threshold. If it runs out of time it may extend the offer again, or allow it to lapse – though that would leave it with a chunky stake in Faroe.
DNO’s executive chairman Bijan Mossavar-Rahmani said: ‘DNO is not going away. For too long shareholders have given the Faroe board of directors a free hand.’
After a brief moment of respite on Wednesday from a rocky few weeks of trading, the FTSE 100 was back on its downward slide yesterday as it sank 0.62pc, or 41.57 points, to 6692.66.
Better-than-expected Christmas trading results at Next saw its shares up 4.1pc, or 173p, to 4350p and provided some lift for the blue-chip index.
Tesco and Morrisons were also on the rise. Analysts at Barclays were positive on Tesco’s prospects, saying they expected reassurance on the profit outlook – shares climbed 4.1pc, or 7.8p, to 199.35p. Barclays was less keen on Morrisons, but its shares edged up by 2.2pc, or 4.75p, to 216.55p.
Russian steel maker Evraz, however, pushed back any gains for the Footsie as its shares dipped 7.7pc, or 37.1p, to 442.1p.
Fears that there may be a manufacturing slowdown in China, a huge steel importer, has knocked investors’ faith in the company, which counts Chelsea Football Club owner Roman Abramovich as its largest shareholder.
Abramovich’s 30.5pc stake sank by £163m yesterday.
Gold companies gave a little shine to the FTSE 250, as the price of the precious metal continued to surge.
Centamin was up 6.5pc, or 7.4p, to 122.15p, while Hochschild Mining jumped 5pc, or 8.2p, to 173p. But the metals companies’ rise was dulled by slides at healthcare components company Renishaw, which fell 7.5pc, or 316p, to 3890p, and engineer Imi, which fell 7.3pc, or 70.5p, to 899p.
Sheffield-based Wandisco, a software company which allows businesses to store data remotely and access it from any device, soared after it bagged a contract with ‘one of the largest mobile network operators in the world’.
The £447,000 contract will last for three years, and Wandisco will work with the computing branch of Amazon. Shares rose 12.8pc, or 61p, to 536p.
Israeli online advertising company Matomy Media, one of the worst-performing stocks of 2018, continued its New Year climb as it emphasised its shake-up would help bondholders get their money back. Shares shot up 13.3pc, or 1p, to 8.5p.