Shareholders push Dana to discuss £1.7-bn takeover offer with KNOC

The battle to acquire Dana Petroleum by State-owned Korea National Oil Corporation (KNOC) is nearing an end after the UK-listed oil explorer finally relented to meet the Korean oil giant to discuss its £1.7 billion takeover offer on shareholder's pressure.

The board of Dana late last night agreed to meet with KNOC this week following shareholders pressure to open a dialogue with Anyang, South Korea-based KNOC.

KNOC held preliminary talks with Dana that started in late June, which ended abruptly, (See: South Korea's KNOC in talks to buy UK's Dana Petroleum)  forcing KNOC to make a £17-per-share cash offer to Dana on 2 July and followed it up by raising its bid to £18 on 20 July after Dana announced that it has discovered new oil in Egypt.

But despite its latest offer that valued the Aberdeen, Scotland-based Dana at £1.7 billion, the board of Dana refused to engage with KNOC on the grounds that it required the state-owned Korean company to show that it has the necessary finances in place to fund the deal.

Dana voiced its concerns publicly on 30 July by saying in a statement that it did not believe KNOC had enough "comfort on financing and other execution risks."

KNOC, which had maintained that it would not like to make a hostile takeover but would like to conduct due diligence, secured funding guarantees from a group of Asian creditors and gave it on 30 July, the same day that Dana voiced the funding capability of KNOC, to RBS Hoare Govett and Royal Bank of Canada, Dana's advisers.