TIDM0MHP TIDMFPM
RNS Number : 0904M
DNO ASA
03 January 2019
Not for release, publication or distribution, in whole or in
part, in or into any jurisdiction where to do so would constitute a
violation of the relevant laws of such jurisdiction
FOR IMMEDIATE RELEASE
3 January 2019
EXTENSION OF CASH OFFER FOR FAROE PETROLEUM PLC
Oslo, 3 January 2019 - DNO ASA ("DNO"), the Norwegian oil and
gas operator, announces today that it has decided to extend for a
further 14 days its 12 December 2018 cash offer for the entire
issued and to be issued share capital of Faroe Petroleum plc
("Faroe") not already owned by DNO at 152 pence per share (the
"Offer"), notwithstanding the significant deterioration in oil and
equity markets and a steady stream of disappointing exploration
news from Faroe.
DNO made its Offer on 26 November 2018 at what it considered to
be a full and fair price for Faroe. The Offer price of 152 pence is
a 44.8 percent premium to the price of 105 pence on 3 April 2018
(the last business day before DNO announced its first acquisition
of shares in Faroe) and a 20.8 percent premium to the Faroe Share
price at the close of business on 23 November 2018 (the last
business day before the announcement of the Offer).
As at 1.00 p.m. (London time) on 2 January 2019, DNO had
received valid acceptances of the Offer in respect of a total of
48,986,566 Faroe Shares representing approximately 13.1 percent of
the issued share capital of Faroe which DNO may count towards
satisfaction of the Acceptance Condition. DNO already owns 29.9
percent of the issued share capital of Faroe. Taken together, the
total number of Faroe Shares which DNO may count towards the
satisfaction of the Acceptance Condition is 160,480,584 Faroe
Shares, representing approximately 43.0 percent of the issued share
capital of Faroe. This is below the Acceptance Condition, being
such number of shares as is equal to one share more than 57.5
percent of Faroe's issued share capital.
Faroe Shareholders will appreciate the downturn in markets from
the time DNO made its Offer on the morning of 26 November 2018 to
the first closing at 1.00 p.m. (London time) on 2 January 2019.
Faroe is a UK AIM-listed company and during this period, the UK AIM
index has fallen by 9 percent(1) , the Brent spot oil price has
fallen by 11 percent(2) and the average Brent futures oil prices
for 2019 and 2020 have fallen by 11 percent(3) and 9 percent(4) ,
respectively.
In light of these factors and other concerns referred to in our
announcement as of 2 January 2019, following the announcements of
Faroe's Competent Persons Report and the dry Brasse East well, DNO
has been faced with a difficult decision as to whether to lapse or
to extend its Offer. After careful consideration, including
factoring in the likely challenge facing some shareholders to act
during the Christmas and New Year holiday, DNO has decided to
extend the Offer for a further 14 days.
If its Offer lapses, DNO cannot make a new offer for another 12
months (subject to the exceptions in the Code) and there can be no
assurances as to DNO's ambitions in these depressed markets.
Whether DNO achieves its Acceptance Condition or not, its goal will
continue to be to safeguard DNO's significant investment in Faroe.
DNO will redouble efforts to replace entrenched directors and
achieve appropriate board representation for the owners of Faroe to
achieve greater transparency and scrutiny; improvement of corporate
governance practices; informed and proactive shareholder "say on
pay" and to prevent further dilutive actions, including large,
off-market options awards to the executive directors.
DNO's full, fair -- and in retrospect, even generous -- Offer
provides Faroe Shareholders with a rare opportunity to exit their
relatively illiquid holdings in Faroe at an attractive price in
volatile and uncertain oil and equities markets. Faroe
Shareholders, including the executive directors who hold
significant numbers of shares, options and matching shares awarded
or available for award through Faroe's various schemes, should
consider where Faroe Shares will trade if DNO's Offer lapses and
what prices larger blocks of shares can command given Faroe's
relatively illiquid AIM-listed position.
The Offer, which remains subject to the terms and conditions set
out in the Offer Document of 12 December 2018, and as further
described in the Form of Acceptance for those holding certificated
Faroe Shares, is being extended and will remain open for
acceptances until 1.00 p.m. London time on 16 January 2019.
DNO ASA Executive Chairman Bijan Mossavar-Rahmani issued the
following statement:
"Even if DNO's Offer lapses or is allowed to lapse, DNO is not
going away. For too long shareholders have given the Faroe board of
directors a free pass. Starting with our first acquisition of
shares, shareholders holding some 43 percent of Faroe's shares have
voted with their feet by seeking to exit all or part of their
positions either through sales to DNO or by accepting our Offer.
Whatever the outcome of this Offer process, we will make every
effort, through regular communication and engagement, to encourage
our fellow shareholders who remain invested to vote their shares
going forward not by proxy but proactively."
Sources
1. The change in the AIM Index trading price from market open at
8.00 a.m. (London time) on 26 November 2018 until 1.00 p.m. (London
time) on 2 January 2019 (from Bloomberg).
2. The change in the Brent spot price from 8.00 a.m. (London
time) on 26 November 2018 until 1.00 p.m. (London time) on 2
January 2019 (from Bloomberg).
3. The difference between the 2019 forward Brent price based on
the average front month mid-point between the bid and the ask
prices for January to December 2019 as at 8.00 a.m. (London time)
on 26 November 2018 and the average front month mid-point between
the bid and the ask prices for March to December 2019 as at 1.00
p.m. (London time) on 2 January 2019 (from Bloomberg).
4. The difference between the 2020 forward Brent price based on
the average front month mid-point between the bid and the ask
prices for January to December 2020 as at 8.00 a.m. (London time)
on 26 November 2018 and the average front month mid-point between
the bid and the ask prices for January to December 2020 as at 1.00
p.m. (London time) on 2 January 2019 (from Bloomberg).
The Offer Document, together with the Form of Acceptance, is
available on DNO's website at
https://www.dno.no/en/investor-relations/offer_announcement_26November.
All Faroe Shareholders are urged to proceed to accept the Offer
in accordance with the instructions set out below.
Actions to be taken:
Faroe Shareholders who have not yet accepted the Offer should
act as soon as possible and by the following deadline:
-- If you hold your Faroe Shares, or any of them, in
certificated form (that is, not in CREST) you should complete and
return the Form of Acceptance accompanying the Offer Document as
soon as possible and, in any event, so as to be received by
Equiniti Limited by no later than 1.00 p.m. (London time) on 16
January 2019.
-- If you hold your Faroe Shares, or any of them, in
uncertificated form (that is, in CREST), you should ensure that an
Electronic Acceptance is made by you or on your behalf so that the
TTE instruction settles as soon as possible and, in any event, by
no later than 1.00 p.m. (London time) on 16 January 2019. You are
reminded that, if you are a CREST sponsored member, you should
contact your CREST sponsor before taking any action.
The procedure for acceptance is set out in paragraph 14 of Part
I of the Offer Document and in Parts D and E of Appendix I of the
Offer Document and, in respect of certificated Faroe Shares, as
further described in the Form of Acceptance. The Offer Document and
the Form of Acceptance will be made available on DNO's website at
https://www.dno.no/en/investor-relations/offer_announcement_26November.
Faroe Shareholders with any questions relating to this
announcement or the completion and return of the Form of Acceptance
or the making of an Electronic Acceptance (as the case may be) or
seeking further copies of the Offer Document and the Form of
Acceptance should contact Equiniti Limited on 0333 207 6399 or +44
121 415 0973 (if calling from outside the UK). Lines are open from
8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (excluding
English and Welsh public holidays).
Level of acceptances and interests in relevant securities
As at 1.00 p.m. in London on 2 January 2019, DNO had received
valid acceptances of the Offer in respect of a total of 48,986,566
Faroe Shares representing approximately 13.1 percent of the issued
share capital of Faroe which DNO may count towards satisfaction of
the Acceptance Condition. So far as DNO is aware, no acceptances
have been received from persons acting in concert with DNO.
As at the close of business in London on 2 January 2019, DNO
held 111,494,018 Faroe Shares, representing 29.9 percent of Faroe's
issued share capital.
Save as disclosed above, as at the close of business in London
on 2 January 2019 (being the latest practicable time and date prior
to the date of this announcement), neither DNO nor, so far as DNO
is aware, any person acting in concert with DNO had:
-- any interest in, or right to subscribe in respect of, or any
short position in relation to Faroe relevant securities, including
any short position under a derivative, any agreement to sell or any
delivery obligation or right to require another person to purchase
or take delivery of Faroe relevant securities; or
-- borrowed or lent any Faroe relevant securities (including any
financial collateral arrangements), save for any borrowed shares
which have been either on-lent or sold.
Furthermore, no dealing arrangement (of the kind referred to in
Note 11 of the definition of "acting in concert" in the Code)
exists between DNO (or, so far as DNO is aware, any person acting
in concert with it) and Faroe in relation to Faroe Shares. For
these purposes, a dealing arrangement includes any indemnity or
option arrangement, any agreement or understanding, formal or
informal, of whatever nature, relating to Faroe Shares which may be
an inducement to deal or refrain from dealing in such
securities.
Accordingly, the total number of Faroe Shares which DNO may
count towards the satisfaction of the Acceptance Condition is
160,480,584 Faroe Shares (representing approximately 43.0 percent
of the issued share capital of Faroe).
The references to the issued share capital of Faroe above are
based on a figure of 372,889,693 Faroe Shares in issue on 26
November 2018.
Compulsory acquisition, cancellation of trading and listing,
re-registration
DNO announced, as set out in the Offer Document, that subject to
the Offer becoming or being declared unconditional in all respects
and DNO acquiring or agreeing to acquire (taken together with the
Faroe Shares already held by it) 75 percent of the voting rights
attached to Faroe Shares, it intends to procure the making of an
application by Faroe to the London Stock Exchange for the
cancellation of the admission to trading of the Faroe Shares on
AIM.
It is anticipated that the application for cancellation of
admission to trading of the Faroe Shares on AIM will take effect no
earlier than the date that is 20 Business Days after DNO has
acquired or agreed to acquire 75 percent of the voting rights
attaching to the Faroe Shares.
The cancellation of admission to trading of the Faroe Shares on
AIM would significantly reduce the liquidity and marketability of
any Faroe Shares not assented to the Offer at that time.
If DNO receives acceptances under the Offer in respect of, or
otherwise acquires, 90 percent or more of the Faroe Shares to which
the Offer relates, DNO will exercise its rights pursuant to the
provisions of Chapter 3 of Part 28 of the Companies Act to acquire
compulsorily the remaining Faroe Shares in respect of which the
Offer has not been accepted.
It is also intended that, following the cancellation of the
admission to trading of the Faroe Shares on AIM, Faroe would be
re-registered as a private company under the relevant provisions of
the Companies Act.
Enquiries:
DNO ASA
Media: media@dno.no
Investors: ir@dno.no
Tel: +47 911 57 197
Brunswick
Patrick Handley
Charles Pretzlik
William Medvei
Tel: +44 20 7404 5959
Lambert Energy Advisory Limited
Philip Lambert
David Anderson
Tel: +44 20 7491 4473
Pareto Securities AS
Petter Sagfossen
Tel: +47 22 87 87 48
Further information
The terms and conditions of the Offer are set out in the Offer
Document and the accompanying Form of Acceptance. Defined terms
used but not defined in this announcement have the meanings given
in the Offer Document unless the context requires otherwise.
This announcement is not intended to and does not constitute, or
form part of, an offer, invitation or the solicitation of an offer
to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Offer or otherwise,
nor shall there be any sale, issuance or transfer of securities of
Faroe in any jurisdiction in contravention of applicable law. The
Offer will be made solely by means of the Offer Document and (in
respect of Faroe Shares held in certificated form) the Form of
Acceptance accompanying the Offer Document, which will, together,
contain the full terms and conditions of the Offer including
details of how it may be accepted.
Please be aware that addresses, electronic addresses and certain
other information provided by Faroe Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Faroe may be provided to DNO during the Offer
Period as required under Section 4 of Appendix 4 of the Code to
comply with Rule 2.11 of the Code.
Lambert Energy Advisory Limited, which is authorised and
regulated in the UK by the FCA, is acting exclusively for DNO and
no-one else in connection with the Offer and will not be
responsible to anyone other than DNO for providing the protections
afforded to clients of Lambert Energy Advisory Limited nor for
providing advice in relation to the Offer or any other matters
referred to in the Offer Document, this announcement or
otherwise.
Pareto Securities AS is acting exclusively for DNO and no-one
else in connection with the Offer and will not be responsible to
anyone other than DNO for providing the protections afforded to
clients of Pareto Securities AS nor for providing advice in
relation to the Offer or any other matters referred to in the Offer
Document, this announcement or otherwise.
Overseas jurisdictions
The availability of the Offer to Faroe Shareholders who are not
resident in and citizens of the UK or the US may be affected by the
laws of the relevant jurisdictions in which they are located or of
which they are citizens. Persons who are not resident in the UK or
the US should inform themselves of, and observe, any applicable
legal or regulatory requirements of their jurisdictions. Further
details in relation to Overseas Shareholders are contained in the
Offer Document.
The release, publication or distribution of this announcement in
or into jurisdictions other than the UK or the US may be restricted
by law and therefore any persons who are subject to the law of any
jurisdiction other than the UK or the US should inform themselves
about, and observe, any applicable requirements. Any failure to
comply with the applicable restrictions may constitute a violation
of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons
involved in the Offer disclaim any responsibility or liability for
the violation of such restrictions by any person. This announcement
has been prepared for the purposes of complying with English law
and the Code and the information disclosed may not be the same as
that which would have been disclosed if this announcement had been
prepared in accordance with the laws of jurisdictions outside of
England.
The Offer is not being made, directly or indirectly, in, into or
from any jurisdiction where to do so would violate the laws in that
jurisdiction. Accordingly, copies of this announcement and formal
documentation relating to the Offer will not be and must not be,
mailed or otherwise forwarded, distributed or sent in, into or from
any jurisdiction where to do so would violate the laws of that
jurisdiction.
Notice to US Faroe Shareholders
The Offer is being made for the securities of an English company
and is subject to UK disclosure requirements, which are different
from those of the US. The financial information included in the
Offer Document has been prepared in accordance with IFRS and thus
may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US.
The Offer will be made in the US pursuant to an exemption from
US tender offer rules provided by Rule l4d-1I under the US Exchange
Act and otherwise in accordance with the requirements of the Code.
Accordingly, the Offer will be subject to disclosure and other
procedural requirements, including with respect to withdrawal
rights, offer timetable, settlement procedures and timing of
payments, that are different from those applicable under US
domestic tender offer procedures and law. If the Offer is instead
implemented by means of a scheme of arrangement as provided for
under English law it will not be subject to the tender offer rules
of the US Exchange Act. Accordingly, the Offer would be subject to
disclosure requirements and practices applicable in the UK to
schemes of arrangement which differ from the disclosure
requirements of US tender offer rules.
The receipt of cash pursuant to the Offer by a US Faroe
Shareholder will likely be a taxable transaction for US federal
income tax purposes and under applicable state and local, as well
as foreign and other tax laws. Each holder of Faroe Shares is urged
to consult his/her independent professional advisor immediately
regarding the tax consequences of acceptance of the Offer.
It may be difficult for US Faroe Shareholders to enforce their
rights and any claim arising out of the US federal securities laws,
since DNO is located in a country other than the US, and some or
all of their officers and directors may be residents of countries
other than the US. US Faroe Shareholders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
In accordance with normal UK practice, DNO or its nominees, or
its brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, Faroe Shares outside the
US, other than pursuant to the Offer, before or during the period
in which the Offer remains open for acceptance. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the UK, will be reported
to a Regulatory Information Service and will be available on the
London Stock Exchange website, www.londonstockexchange.com.
Forward looking statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Offer and other information published by DNO contain statements
which are, or may be deemed to be, "forward-looking statements".
Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and
projections of the management of DNO about future events and are
therefore subject to risks and uncertainties which could cause
actual results to differ materially from the future results
expressed or implied by the forward-looking statements. The
forward-looking statements contained in this announcement include
statements relating to the expected effects of the Offer on DNO and
Faroe, the expected timing and scope of the Offer and other
statements other than historical facts.
Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "plans",
"expects" or "does not expect", "is expected", "is subject to",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", "believes" or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "should", "would", "might" or "will" be
taken, occur or be achieved. Although DNO believes that the
expectations reflected in such forward-looking statements are
reasonable, DNO can give no assurance that such expectations will
prove to be correct. By their nature, forward-looking statements
involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by such
forward-looking statements. These factors include the satisfaction
of the Conditions, as well as additional factors, for example, oil
and gas operations, particularly those relating to development
stage assets which are subject to varying inputs that may impact
timing, including, inter alia, permitting, environmental
regulation, changes to regulators and regulation, third party
manufacturers and service providers, the weather and asset partner
and operator actions. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. DNO, its
associates, directors, officers and advisers provide no
representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in
this announcement will actually occur. You are cautioned not to
place undue reliance on these forward-looking statements. Other
than in accordance with its legal or regulatory obligations DNO is
under no obligation, and DNO expressly disclaims any intention or
obligation, to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
No profit forecasts or quantified benefits statement
No statement in this announcement is intended as a profit
forecast, profit estimate or qualified benefits statement and no
statement in this announcement should be interpreted to mean that
earnings per Faroe Share or DNO share for the current or future
financial years would necessarily match or exceed the respective
historical published earning per Faroe Share or DNO share or to
mean that the enlarged group's earnings in the first 12 months
following the Offer, or in any subsequent period, would necessarily
match or be greater than those of Faroe or DNO for the relevant
preceding financial period or any other period.
Dealing disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1
percent or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the 10(th) business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the 10(th) business day following
the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 percent or more of any class of relevant securities
of the offeree company or of any securities exchange offeror must
make a Dealing Disclosure if the person deals in any relevant
securities of the offeree company or of any securities exchange
offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s), save
to the extent that these details have previously been disclosed
under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b)
applies must be made by no later than 3.30 p.m. (London time) on
the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website and hard copies
A copy of this announcement and the documents required to be
published by Rule 26 of the Code is and will be available, subject
to certain restrictions relating to persons resident in Restricted
Jurisdictions, on DNO's website
https://www.dno.no/en/investor-relations/offer_announcement_26November.
For the avoidance of doubt, the contents of such website are not
incorporated into and do not form part of this announcement.
You may request a hard copy of this announcement by contacting
Equiniti Limited on 0333 207 6399 or +44 121 415 0973 (if calling
from outside the UK) or by submitting a request in writing to
Equiniti Limited, Corporate Actions, Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA. Lines are open from 8.30 a.m. to
5.30 p.m. (London time) Monday to Friday (excluding English and
Welsh public holidays). Calls to the helpline from outside the UK
will be charged at applicable international rates. Different
charges may apply to calls from mobile telephones and calls may be
recorded and randomly monitored for security and training purposes.
Please note that Equiniti Limited cannot provide advice on the
merits of the Offer nor give financial, tax, investment or legal
advice. If you have received this announcement in electronic form,
copies of this announcement and any document or information
incorporated by reference into this announcement will not be
provided unless such a request is made.
About DNO
DNO is a Norwegian oil and gas operator focused on the Middle
East and North Sea. Founded in 1971 and listed on the Oslo Stock
Exchange, DNO holds stakes in onshore and offshore licences at
various stages of exploration, development and production in the
Kurdistan region of Iraq, Norway, Oman, the UK and Yemen.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
OUPBJMFTMBTMMPL
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