By Cho Jin-seo
Korea National Oil Corporation (KNOC) said it has successfully collected enough support to buy U.K.-based Dana Petroleum, in the first case of a hostile acquisition for a Korean state-owned company.
In a filing to the London Stock Exchange and on its website on Friday, KNOC said it managed to secure 64.26 percent of Dana shares from its existing shareholders, and received a regulatory approval from the U.K. government.
The shares that KNOC has secured are worth 1.07 trillion pounds ($1.67 billion or 1.93 trillion won), since the offered price was 18 pounds a share.
KNOC will need to have more than 75 percent of the shares to privatize Dana under the British corporate code, which it hopes to do in the future. If it succeeds to delist the firm from the London stock market, KNOC will have more leeway in managing Dana.
“We will continue to urge shareholders who have not accepted our offer to accept it immediately,” the firm said in a statement.
Dana is an oil exploration firm based in Aberdeen, Scotland. It has various assets such as oil reserves and rights in the North Sea and Africa. KNOC estimates Dana’s proved and probable oil reserve amounts to as much as 250 million barrels.
Dana’s management had been trying to solicit a higher offer from the Korean energy company, insisting that its shares should fetch around as much as 25 pounds. But their appeal failed, as a majority of shareholders and market analysts have found KNOC’s bid fair and attractive under the current market conditions.
Korea imports almost all of its energy supply from overseas. KNOC believes that with Dana in hand of KNOC the country’s energy dependency rate can fall a little to 90 percent from 91 percent.
KNOC also sees the acquisition as a chance to diversify its geographic portfolio into the North Sea and Africa. Its current projects are mostly located in America, Russia and central Asia.
Before going after Dana, KNOC had purchased Canada’s Harvest Energy for $1.7 billion last October. Last week, the state energy firm said it will hire more than a hundred new employees, claiming that its assets have doubled over the past two years.
The Dana acquisition was first officially proposed in June. Despite gestures of protest from the Dana management, KNOC was widely expected to win shareholders’ empathy.
On Thursday, the U.K. Office of Fair Trading approved the hostile acquisition. Par Young-june, Korea’s vice minister of knowledge economy, who oversees energy policies, had also confirmed earlier this month that the deal was on its way.
KNOC originally offered to buy Dana only when it can secure more than 90 percent of its stiock from existing shareholders, so that it can delist the firm from London Stock Exchange and make it a wholly owned subsidiary according to U.K. corporate law. But on Friday, the firm said it is waiving this condition and will buy Dana regardless of whether it can secure further acceptances from shareholders or not.
Once it owns more than 75 percent of the shares, Dana will be automatically delisted from the stock market. When KNOC’s portion goes over 90 percent, then other remaining shareholders must sell their shares to KNOC under the British corporate code.
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