Dana Petroleum rejected a hostile £1.67 billion bid from Korea National Oil Corp today, citing an independent valuation that said the UK explorer was worth considerably more.
Dana also unveiled the acquisition of North Sea assets from Canada's Suncor for £240 million, saying this supported the case for KNOC raising its bid as the independent experts said the assets were really worth £368 million.
Last month state-controlled KNOC made its £18 bid direct to Dana's shareholders after failing to convince Dana management to recommend its bid.
Dana said independent experts it hired to value the company said it was worth from £21.2 to £24.65, based on existing assets and over £30 if one assumed success in its exploration plans.
"The Dana board .. does not want to see the company sold below fair value to the detriment of Dana shareholders," Dana chief executive Tom Cross said.
Shares were unchanged at £18.08 in early trade today. That price suggests investors do expect a small increase in KNOC's bid. However, analysts that cover Dana have said the £18 bid is a good price.
KNOC declined immediate comment on the statement.
Korea gave KNOC a $6.5 billion war chest this year to compete with energy-hungry Asian state firms looking to secure supplies for their growing economies. The company has a target to raise the nation's production capacity to 300,000 barrels per day (bpd) by 2012 from 130,000 bpd in December.
Chinese and Indian firms have so far outgunned KNOC, which explores and stores oil, in bigger merger and acquisition battles.
Reuters