Faroe chief will pocket £12.5m in sale to DNO

Takeover: Boss given notice yesterday

Faroe Petroleum’s chief executive will pocket £12.5 million as he leaves the company following a hostile takeover by Norwegian oil operator DNO.

Graham Stewart, along with chief financial officer Jonathan Cooper and chief operating officer Helge Hammer, was yesterday given three months’ notice to step down.

Faroe said in a statement that the directors will stay on “until such a time as replacement executive directors are appointed” to ease the transition but will leave within three months “at the latest”.

Mr Stewart, who helped found Faroe, holds 7.8m shares in the offshore firm.

Earlier this week DNO acquired a controlling stake in Faroe after making a final “cash offer” of £1.60 per share, valuing the firm at £641.7m and Mr Stewart’s stake at £12.48m.

Faroe’s directors have since said they would accept the latest offer, but added it did not reflect “fair value”. Helge Hammer’s shares in the company are worth £7.3m, while Jonathan Cooper is due a £5.8m pay day from his stake.

Graham Stewart, who is of Faroese origin, has been chief executive of Faroe Petroleum since December 2002. It was initially set up as the holding company for Foroya Kolvetni, an oil exploration firm which participated in the first Faroese licensing round in 2000. Faroe Petroleum was awarded its first licenses in the UK in 2004, and two years later entered Norway, where most of its activities are based today.

In April, DNO announced its interest in Faroe by snapping up almost 30% of shares.

In November it then made an initial cash offer of £1.52 per share, which directors continuously rejected due to it “undervaluing” the company.

DNO said it intends to retain Faroe’s Aberdeen base, along with its other sites, but also plans to de-list the company from the London stock exchange.

Faroe issued a statement on the termination of Mr Stewart’s employment, along with the other executive directors. It said: “The executive directors stated their intention to resign from all directorships and other offices which they hold with Faroe Petroleum and all of its subsidiaries as soon as is practicable, with the intention of remaining as directors until such time as new replacement executive directors are appointed, to ensure an orderly transition, but in any event at the latest by the end of their three month notice periods.” Sterling was on the rise yesterday following growing speculation that Brexit will be delayed beyond the current March 29 exit date for the UK leaving the EU.

Currency traders pushed the British currency up 0.6% to 1.282 US dollars at the London market close, the highest Sterling has been since November last year.

Versus the euro, sterling was also up 0.6%, trading at 1.117.

Meanwhile, the FTSE 100 shed 24.69 points, or 0.36%, to close at 6,918.18.

In Europe, Germany’s DAX was down 0.3% while France’s CAC 40 dropped 0.68%.

A barrel of Brent Crude was trading at 60.8 US dollars, down 0.7%.

The biggest risers on the FTSE 100 were Taylor Wimpey up 7.15p at 156.05p, Persimmon up 92p at 2,203p, Barratt Developments up 14.2p at 503.4p and IAG up 15.2p at 610p.

The biggest fallers on the FTSE 100 were NMC Health down 148p at 2,782p, Smurfit Kappa down 102p at 2,142p, Astrazeneca down 211p at 5,712p and Melrose down 5.9p at 170.8p.

“The directors will stay on until such a time as replacements are appointed”

LEAVING: Graham Stewart and two other senior officers have been given their notice