Market Tracker Weekly Bulletin- 13th December 2018

Market Tracker Weekly Bulletin- 13th December 2018

A round up of key developments in corporate transactions covered by Lexis®PSL Corporate and Market Tracker this week, including the first clean energy investment firm to list on the Main Market, Baillie Gifford’s revised placing timetable in light of the Brexit vote, a review of the Green Park report on ethnic diversity targets and a look at geopolitical factors in transaction documents.

Transactions: Takeovers

Update on Faroe Petroleum plc offer by DNO ASA

The consistent decline in oil prices has left some companies operating in the oil and gas industry at a risk of being taken over by a stronger competitor. AIM listed Faroe Petroleum plc (Faroe) is under a hostile takeover by DNO ASA (DNO) and has branded it ‘opportunistic given the recent fall in oil prices’.

DNO, who holds 28.22% of Faroe’s shareholding, announced a firm offer on 26 November 2018, valuing the entire issued shareholding of Faro at £607.9 million. Faroe urged its shareholders not to take action while it deliberated with its advisers on the offer.

On 5 December 2018, Faroe announced that it had entered into a binding agreement Equinor Energy AS (a wholly owned subsidiary of Equinor ASA) (Equinor) to swap its interests on a cashless basis with in return for interests in four production assets on the Norwegian Continental Shelf. The transaction has an effective date of 1 January 2019 and is subject only to consent from the Norwegian authorities.

DNO responded stating that despite Faroe’s assertions that the swap would not affect its offer, it wanted to investigate the impact of the significant swap before making a judgment:

‘This is a significant deal for Faroe, and we need to understand it before making a judgement. While Faroe has asserted this is not designed to stop the DNO offer, we need to ask if this is good value for a company seeking growth: to swap out of its high quality, large scale, core growth

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