Market Tracker weekly bulletin – 17 January 2019

Market Tracker weekly bulletin – 17 January 2019

A round up of key developments incorporate transactions covered by Lexis®PSL Corporate and Market Tracker this week, including an update on the hostile offer for Faroe Petroleum by DNO ASA, a look at the recommended offer for Flybe Group plc by joint venture company Connect Airways Limited and a response to press speculation by Premier Oil plc.

 

Takeovers

 

Faroe Petroleum plc offer by DNO ASA

On 26 November 2018, DNO ASA (DNO) announced a hostile cash offer for the entire issued share capital of Faroe Petroleum plc (Faroe). The original offer of £607.9 million at 152 pence per share was rejected by Faroe, who stated that it undervalued the company. Following this, Faroe published its intention to swap the interests of Equinor Energy AS for the interests infour production assets on the Norwegian Continental Shelf on a cashless basis. Faroe then circulated a defence document on 20 December 2018 and a  second defence document on 4 January 2019, urging shareholders not to accept DNO’s offer on the grounds that, unlike DNO’s offer, the proposed swap and explorations would increase the value of the company.

On 2 January 2019, leading independent oil and gas consultants, Gaffney, Cline & Associates (GCA), prepared an asset valuation highlighting the inadequacy of DNO’s offer. GCA’s analysis concluded that inthe current oil price environment Faroe's oil and gas assets were valued inthe range of £695.4 million—£1.076 billion.

On 4 January 2019, DNO increased its shareholding to 30% and triggered a mandatory offer as provided inRule 9 of the Takeover Code.  On 8 January 2019, DNO increased it final cash offer to £641.7 million at 160 pence per share.

On 9 January 2019, Cavendish Asset Management (Cavendish), a minority shareholder of Faroe, announced that it considered DNO’s offer to be unacceptable and despite the increased final cash offer Cavendish believed that the offer

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Market Tracker is a unique service for corporate lawyers housed within Lexis®PSL Corporate. It features a powerful transaction data analysis tool for accessing, analysing and comparing the specific features of corporate transactions, with a comprehensive and searchable library of deal documentation across 14 different deal types. The Market Tracker product also includes news and analysis of key corporate deals and activity and in-depth analysis of recent trends in corporate transactions.