Faroe Petroleum Share Discussion Threads

[bomfin] 20/12/2018 21:14

And since I am here. What are thoughts on IrisHades value. Big discovery.

[bomfin] 20/12/2018 21:12

Yes.lol. Not to mention either of the 2 wells drilling can add another 25p per share value.

[ed 123] 20/12/2018 21:08

Where have you been hiding, Bomfin? :-)

[bomfin] 20/12/2018 20:52

The Equinor swap throws off 96 million accelerated cash flow in the next 2 years. Find me a company anywhere else that is doing that comparative to market cap and I shall invest there. For now, FPM remain a very undervalued value play.

[fntc] 20/12/2018 19:57

I think the main reason for that is that DNO took over the senior management of Origo Exploration (now DNO Norge AS) last year, when they got that company essentially for free, by taking on their license obligations. That team has a proven track record from previous NCS companies. Ørjan Gjerde and Svein Ilebekk, etc.

[rogerlin] 20/12/2018 19:47

DNO seem to want to buy Faroe's assets without the senior management. Personally I think Faroe is worth considerably more with the management who have overseen a good deal of progress in the last couple of years. Yes they get plenty of options but then they do the work. So the value should be higher if the company is not disrupted.

[fntc] 20/12/2018 19:31

"Faroe clarifies that the following quotation which appeared in an article titled "Faroe CEO Expects Owners to Reject DNO's Bid Despite Oil Slump" on Bloomberg Intelligence on 20 December 2018 of:

"Faroe again hit back Thursday, urging its shareholders to reject the bid. "I would definitely expect" them to do just that, Chief Executive Officer Graham Stewart said in a phone interview."

was intended to express a management belief and should not be construed as a formal statement of support as outlined in Rule 19.3 of the UK Takeover Code."

Does that mean that he was violating Rule 19.3 when talking to Bloomberg and had to issue this statement to all shareholders?

Rule 19.3 says that: "Parties to an offer and their advisers must take care not to make statements which, while not factually inaccurate, may be misleading or may create uncertainty."

[ed 123] 20/12/2018 19:04

Agree, FNTC. :-)

[fntc] 20/12/2018 19:02

The point with stopping at 29,9% is that they have a standing offer with condition of receiving minimum 57,5%. If they don't they can walk away and keep their 29,9%. If they cross 30 now they will have to bid without condition and take whatever they get, even if it is below 50%.

[ed 123] 20/12/2018 18:59

Ta, Hashertu. :-)

Bountyhunter. DNO are free to buy in the market at up to 152p but if they go over 30% they have to make their offer unconditional. So, there's nothing to stop them buying over 30%, but if they want to preserve the conditions that presently apply to their bid they need to keep under 30%. There's also nothing to stop them buying in the market at over 152p but, if they do, then they must increase their offer to match the highest price they paid.

It makes sense for them to do as they have, ie. mop up shares at up to 152p and not exceed 30%.

Yes, it's like a game of poker or who blinks first. However, for the institutions Faroe will be only a small part of their investments, so another 5 or 10p or even 20p will not affect things overall very much.

FWIW, if DNO get less than 50% (including current holding) after the count, I'd expect them to pay for the ones offered, even though their conditions mean they could reject the shares offered. So, if Faroe get good institutional support and DNO is restricted to say 40% in total, I'd expect DNO to stick at that level and return in another 12 months, looking for the extra 10%.

Reflecting on the whole affair, the killer for Faroe may be the additional shares (over and above the Delek holding) which DNO managed to get at 125p. Without that extra 12%, arguably a bid of 160p or so might have been needed to reach the 50% control level.

[hashertu] 20/12/2018 18:48

BH. It is my understanding that the 30% level is not relevant now that a formal offer has been made.
The next significant threshold is 50%+1 at which point the bid is unconditional.

If DNO buy shares above 152p in the market place, then this rule applies.

"1.6 Purchases at Above the Offer Price
If, during the course of an offer, an offeror purchases an interest in shares at above the offer price, such offeror must increase its offer to not less than the highest price paid (Rule 6.2 of the City Code)."

DNO can also increase the offer price during the offer period, either by modifying the offer directly, or indirectly by buying shares at a higher price.

Where this might get messy is if DNO buy, or get acceptances, up to 50%, but don't exceed it and let the offer lapse. What happens then?

[mirabeau] 20/12/2018 18:32

Getting nasty here with this late RNS!

[bountyhunter] 20/12/2018 17:34

Ed I get that DNO may not want to pay more than 152p to go over 30% but what's stopping them buying in the market at 152p or less to go over 30%?

[jasper2712] 20/12/2018 17:11

It makes me wonder why DNO did not take up their shares to 29.9% before they announced their bid of 152p?
Was it to make their offer more attractive based on the figures they have been using
or
do they not mind paying extra for the shares they have since acquired from when they were buying at 125p.
They are playing a game of poker. They are upping the stakes and it is a bluff.
Do not cave in . Wait to see them fold and save up some more cash before returning to the table

[thedudie] 20/12/2018 15:39

Well we will see how supportive they are .....
DNO needs around another 100million doesn't it?
Would be a shame if Faroe stay independent but lose potential assets - especially if a lot of effort has been sunk into any deal(s)
td

[scaff55] 20/12/2018 15:30

Sorry missed abit.
Providing a potential catalyst for further moves within the takeover period running until Feb. 10, Faroe expects to publish drilling results of its Brasse East and Cassidy wells.

[oli12] 20/12/2018 15:10

Well DNO have the oil price and market sentiment on their side. This will be closer than some believe IMO. Let’s see.

[ed 123] 20/12/2018 14:00

FNTC is right. When a holder sells in the market it is an unconditional sale. So, to give everyone the same offer, a buy above 30% will mean that every holder has to be afforded the same deal, ie. unconditional, and at the highest price paid by the offeror.

Yes, 'holding them back' would be competition with other buyers at or under 152p and their likely wish not to reach 30% of the issued capital before the bid result.

Wider market conditions and the oil price have been in DNO's favour since their announcement of intention to bid at 152p.

FWIW, I'd expect the big holders to go for the cash. Although they may (will?) have hoped for more, current market conditions and prospects for 2019 may prove to be the decider.

[bountyhunter] 20/12/2018 13:56

Is that the rule? I thought it was a much higher percentage re unconditional.

[fntc] 20/12/2018 13:54

They don't want to have to make the bid for all shares unconditional. They want to be able to walk away if they dont get a majority.

[bountyhunter] 20/12/2018 13:51

29.9%, not much of an increase really from months ago since it has been suggested they are mopping up the shares, what's holding them back!

[ed 123] 20/12/2018 13:09

Yes, FNTC, I'd agree with your analysis.

Just a couple of days for me to accept via nominee account. If I don't accept, then I'll be holding for the result.

In the early days, between DNO's rns intention and the actual bid, there was likely a chance of a few more pence for a recommendation. Looking at the market today, I'd say that possibility has gone.

FWIW, I'm leaning towards accepting with the remainder of my holding.

[thegreatgeraldo] 20/12/2018 12:46

FNTC
20 Dec '18 - 12:44 - 1719 of 1720
0 0 0
Dno just disclosed a buy of 4,8 million shares. They have 29,9% total noe. Not sure if they can cross 30% without having to bid with no conditions?

That was vikingbhoy's take yesterday (think it was vb!)