Office of Fair Trading decides not to refer KNOC's bid for Dana Petroleum to the UK's Competition Commission

The UK’s Office of Fair Trading last week said it will not be referring the Korea National Oil Corp offer for Dana Petroleum to the country’s competition watchdog. In its ruling, the office reiterated there was no need to refer the Korean takeover plans for the British firm, Dana Petroleum to the Competition Commission. Its decision was motivated by information available under the UK’s 2002 Enterprise Act.

A full notice on the decision to allow the merger to go ahead was due to be published by the OFT later today. In that move, the competition authority effectively gave its thumbs up for the acquisition of Dana by the Korean oil firm. Korea National Oil Corp.’s offer was pegged at 1.87 billion pounds. The takeover will create a merger with Dana Petroleum Plc, outdoing a potential barrier to the hostile bid made by the state owned South Korean oil firm.

That effectively gives the Korean firm the go ahead to conclude the takeover transaction. The statement from the competition authority came before an initial deadline later Thursday last week when the Korean oil firm was expected to get more than 50 per cent of the British firm, Dana Petroleum shares. Dana Petroleum, based in Aberdeen, Scotland has maintained over time that Korea National Oil Corp’s 1800 pence per share offer made on the 20th of August this year undervalues the firm.

That position was kept by the firm despite the fact that the Korea National Oil offer had received support from shareholders and analysts alike who were in support of the Korean firm’s view that the offer was fair and full one. Although KNOC has until late October to declare its offer unconditional, investors believe that it could do so as early as Thursday or Friday on receipt of the required 90% shareholding.

Dana Petroleum is a leading British-based oil and gas exploration and production business. Its activities are focused on the North Sea and Africa. Korea National Oil Corporation (KNOC) is the national oil and Gas Company of South Korea and one of the most important industrial companies in the country.

The company operates oil and gas fields in Vietnam, Libya, Peru, Indonesia, Nigeria, Yemen, Kazakhstan, Russia, Canada and South Korea. The company has oil reserves of around 600 million barrels and gas reserves of 10 billion m3.

26 Sep 2010