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Norway's DNO raises Faroe Petroleum bid to $816 million

Norway's DNO raises Faroe Petroleum bid to $816 million
FILE PHOTO: The word oil is pictured on an oil bank at a recycling yard in London March 2, 2011. REUTERS/Stefan Wermuth/File Photo -
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Stefan Wermuth(Reuters)
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(Reuters) - Norwegian oil company DNO ASA <DNO.OL> raised its bid for Britain's Faroe Petroleum <FPM.L> to 641.7 million pounds ($816 million) on Tuesday, lifting its cash offer to 160 pence per share from 152 pence.

Shares in Faroe, which rejected DNO's 610 million pound hostile bid in November as inadequate and "opportunistic", have since ranged between 140 pence and 160.8 pence.

DNO's Chairman Bijan Mossavar-Rahmani said in a statement that while the company "does not overpay for assets", it was in the interest of most parties to raise its offer.

The deal will be funded from cash resources and the closing date for the final offer has been set for Jan. 23, DNO said.

DNO, which has been building up a stake in Faroe since April, said its combined ownership and bid acceptances on Jan. 4 stood at 43.8 percent. It requires 50 percent of Faroe's shareholders to back its takeover bid.

Faroe had no immediate comment after DNO raised its offer.

Paul Mumford of Cavendish Asset Management, who according to Refinitiv Eikon data holds 1.4 percent of Faroe and who has said DNO's previous offer was too low, said on Tuesday that the revised offer - which he also referred to as "low-ball" - looked likely to succeed.

"For minority shareholders this may be the nail in the coffin. They are unlikely to want to stick around with DNO holding a controlling stake in the business," he said.

(Reporting by Tanishaa Nadkar in Bengaluru, additional reporting by Ron Bousso, Shadia Nasralla; Editing by Shailesh Kuber, Alexander Smith and Jan Harvey)

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