Faroe Petroleum Share Discussion Threads

[redartbmud] 19/12/2018 10:21

What about those who bought the rights at 77p a while ago?
Tempting.

[thedudie] 19/12/2018 10:14

Well looks to me that this bid isn't going through.

Every other bid where I have held stock has resulted in the price staying below the bid price and people essentially transferring their shares to the bidder for a few pence less than the bid to avoid the delay in getting their money. I have done this myself previously. This usually results in volume multiples that are many times the normal daily volume and all below the offer price. The bidder just soaks up the sales. This hasn't happened here, they picked up 900k Monday, possibly a few hundred thousand yesterday and maybe (if they are the only buyer at 1.52) a few today (but most transactions are above 1.52).

I doubt they will walk.
Barclay say 1.85 / Cavendish say 2.25 and a whole bunch of other people have bought >1.52

It will take a bit more than a few pence extra. My bet is at least £1.75.

td

[willie99] 19/12/2018 09:46

If the bid had been 6 or 8 weeks earlier, there would be a much higher chance that DNO would have to increase there offer. Unfortunately for FAO, the oil price has conspired against them, and DNO have taken full advantage of the situation. I originally planned to wait for a higher offer, however I don’t think that will happen. There is also a risk that DNO will walk away if they dont get success at 152p, in which case the share price will fall to circa £1. A bird in the hand is worth two in the bush....time to move on.

[manrobert] 19/12/2018 09:07

the faroe board seem very laid back so far and they have not given any reason why dno shoul raise their bid and share price now only slightly above the offer

[ed 123] 19/12/2018 09:04

151.8/152.2p. DNO are free to hoover up any selling.

Atm, it looks like DNO are winners with their 152p offer.

Is it time for the institutional holders to settle, while they still have a bit of power? Maybe they can get another few pence per share for a recommendation. Need to go back to Faroe management?

[redartbmud] 19/12/2018 08:58

jasper

Not well worded in the Takeover code, but I believe it is the highest price that they paid in that period.

interestingly, the share price is now trading below 152p to buy!

[jasper2712] 19/12/2018 08:54

at the highest price paid in the 12 months before the offer was announced

Is that the highest price THEY paid to obtain their 30% or is it the highest price that had been paid in the previous 12 months by other investors?
If they keep their quota below 30% then does this allow them to bypass these rules as DNO have done. The share price went to 175p before they tabled the 152p offer.

[redartbmud] 19/12/2018 08:39

From the Takeover code:

When a person or group acquires interests in shares carrying 30% or more of the voting rights of a company, they must make a cash offer to all other shareholders at the highest price paid in the 12 months before the offer was announced (30% of the voting rights of a company is treated by the Code as the level at which effective control is obtained).

[bountyhunter] 18/12/2018 19:48

Yes, that's how I understand it. We are on the same page there! :)

[wbodger] 18/12/2018 19:40

That was not very well put. I meant the change of ownership cannot be assumed until the Offer is unconditional.

[bountyhunter] 18/12/2018 19:31

Absolutely.

[wbodger] 18/12/2018 19:29

Yes, I don't know the physicality of it. Seems unlikely that people would be rushing around with certificates/cash. The principal is that the bargain is not secure until the condition is met or lapses.

[bountyhunter] 18/12/2018 19:08

Surely just some potential acceptances rather than in escrow, although I'm not quite sure how it works outside nominee holdings.

[wbodger] 18/12/2018 19:04

Shares in the Offer have not changed hands, they will be in escrow until the Offer succeeds or lapses. They have to report the result of the offer then unless it is extended.

All holders of 1% or more have to declare their initial holding within ten working days of the Offer, ie Christmas Eve.

[fntc] 18/12/2018 18:50

Zero, they just increased from 28.22% to 28.47% yesterday. All larger holders have to announce all buys and sales daily now during the offer period.

[bountyhunter] 18/12/2018 18:44

For every 1% crossed above the 28% DNO would surely have to issue a holding RNS, how many have there been?

[wbodger] 18/12/2018 18:30

Trying to keep it simple, DNO have made a bid which runs until January 2nd midday (ish). The test for 'unconditional' protects them, in that the bid lapses and they return certificates if they don't get 57.5% + 1, so I don't think it would make sense for them to buy in the market and defeat their own protection.

If they do get 57.5% they plan to announce 'Unconditional', pay funds into escrow, and swap it for shares, also in escrow. They must leave the offer open for subsequent acceptance for 14 days. They will de-list if they get 75%, and compulsorily purchase minority holdings when they own 90%.

If it isn't unconditional initially then they can extend it, but no later than February 10th. If the bid lapses (less than 57.5%) the certificates will be sent back from escrow and DNO will get their cash back from escrow.

I think that's it from a speed-read of the Offer. Really the 30% doesn't come into it any more, if the offer succeeds DNO take control, if it lapses it was a conditional offer anyway.

(Market transactions are between willing traders and unaffected.)

[thegreatgeraldo] 18/12/2018 16:37

vikingbhoy -

"if DNO were to just buy shares in the market today outside the offer process and they get above 30%.They would be required to launch an unconditional offer for all shares or sell enough shares to get back below 30%"

OK, I wasn't aware of that.

[vikingbhoy] 18/12/2018 16:24

tgg: I was not talking about what they get in the bid, I agree that if they get below 57% it lapses. I was talking about what happens if DNO were to just buy shares in the market today outside the offer process and they get above 30%. They would be required to launch an unconditional offer for all shares or sell enough shares to get back below 30$

[oli12] 18/12/2018 16:19

Decent volume today over 4m shares traded so far. You wonder if DNO have played a blinder. Given the wider markets holders might be more tempted to accept and cash in even though they know its worth more. Given the price fall back to the offer level one wonders whether DNO would bid more or simply be content in the medium term getting seats at the table as the largest shareholder, they have a reputation of playing hard ball.

[thegreatgeraldo] 18/12/2018 16:18

vikingbhoy
18 Dec '18 - 16:10 - 1674 of 1674
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"My understanding is there is no need for DNO to sell if they were to get above 30%,"

...Agree with you there (if the stock is bought & paid for)..


"but the offer would have to be mandatory and unconditional to ensure smaller stakeholders can get out."

...I think the opposite is true; if the bid fails, it lapses & acceptances would be null & void.

However, I'm not an expert on corporate takeover law (by any means!), so don't want to get into an argument over the finer points!

[vikingbhoy] 18/12/2018 16:10

My understanding is there is no need for DNO to sell if they were to get above 30%, but the offer would have to be mandatory and unconditional to ensure smaller stakeholders can get out. If DNO were to by 2% today the can, but the offer would no longer be conditional on obtaining 57% of the total shares. I think it's all fairly academic anyway, since I think DNO wants all of FPM so are unlikely to put themselves in that position. I think what wbodger is thinking of is that if you get above 30% you have to either launch a mandatory offer or sell enough shares to get back below that level.

[thegreatgeraldo] 18/12/2018 15:59

oto1
18 Dec '18 - 15:42 - 1672 of 1672
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FNTC

Not sure if I agree on Your comment regarding the acceptance criteria.
DNO is obliged to follow through on the offer if the acceptance criteria is met (57,5% + 1 share or whatever it was).
However, I still believe it is up to DNO if they want to accept offered shares if the acceptance is below.

.... Any shares that DNO were to buy in the market (up to 152p), they can hold on to. If the bid fails, the offer lapses, so DNO could not then pay for any shares that accepted the offer... AIUI!! Hostile takeovers aren't the norm these days & few start from such a strong position (28%)

[oto1] 18/12/2018 15:42

FNTC

Not sure if I agree on Your comment regarding the acceptance criteria.
DNO is obliged to follow through on the offer if the acceptance criteria is met (57,5% + 1 share or whatever it was).
However, I still believe it is up to DNO if they want to accept offered shares if the acceptance is below.
So in my opinion they can choose to say OK even if they only get let's say 45%. But then they don't have to.

At least this is how it works in Norway where i have seen on numerous occasions that a bid is accepted even if the criteria met is not fulfilled (normally 90%).

There may be special UK rules, again, that prevents them from doing this, but I have not seen any.

If they can I believe DNO will be satisfied with anything above 40%, and then spend more time in obtaining the remaining in order to get above 50% fully diluted.

In such case board exchanges will start and a merger will eventually be put on the table.

[wbodger] 18/12/2018 15:13

Hmmm, I can see some holes in that, but respect your usual knowledge of this stuff.