Faroe Petroleum Share Discussion Threads

[hashertu] 21/12/2018 13:28

Abstract from this link concerning rule 5 and 9 of the takeover code.
I do not see the difference between the current offer and a mandatory offer as both can be conditional (on a level of acceptance).
Interesting that DNO is controlled by RAK (40%). RAK is controlled by Rahmani (35%) via class A and class B (which have two votes) shares.
Having looked both DNO and RAK final reports, I think FPM has a better, and safer, spread of assets and corporate governance.

hxxps://www.slaughterandmay.com/media/39320/a-guide-to-takeovers-in-the-united-kingdom.pdf

1.4 Mandatory Offer (a “Rule 9 Offer”)

Notwithstanding that purchases may be permitted as referred to in paragraph 1.2 above, if an offeror either:

acquires (whether or not pursuant to a series of transactions or over a period of time) an interest in shares which, together with shares in which the offeror is already interested, carry 30 per cent. or more of the voting rights in a target company; or

B. where it is interested in shares which carry 30 per cent. or more but less than 50 per cent. of
the voting rights in a target company, acquires an interest in shares in that company which increases the percentage of its voting rights,

then that offeror will, except with the consent of the Panel, be required to make a “mandatory offer” for all of the ordinary shares in the target company not already owned by it. There are limited purchasing freedoms for controlling shareholders and to allow shareholders to take up their entitlement under secondary issues.

The following must be noted in relation to a mandatory offer:

i. the offer is permitted to be conditional only upon the level of acceptances referred to in ii below and, if appropriate, there being no reference to the Competition Commission or Phase II proceedings being initiated by the European Commission under the EU Merger Regulation;
38 A Guide to Takeovers in the United Kingdom /

ii. the acceptance condition is that only 50 per cent. (plus one share) acceptances are required; and

iii. the offer must be for cash or accompanied by a full cash alternative at not less than the highest price paid by the offeror for target shares within the preceding 12 months.

[redartbmud] 21/12/2018 13:16

The FPM rejection document has just landed on my doormat.
will it have the desired effect on shareholders?

[churchill2] 21/12/2018 13:13

Nobody seems to have noticed that the DNO share price has fallen a long way in a short period of time. The DNO management must be on edge as to the merit of this bid.

[oto1] 21/12/2018 12:35

Ed 123: "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%."


That is exactly what I believe will happen also.
But then again, as mentiones earler, they may have to make the offer unconditional first in order to actually buy the shares offered?

In Norway DNO could decide to accept the offered shares, even if the conditional target was not met. Not sure if this is possible in UK.

If DNO decides to go unconditional, this will also mean they will start purchase of shares at max 152p at the exchange again.

None of this will happen before 2.nd January.

If DNO gets between 40-45% fully diluted, this means they will get a voting of >50% at all GM's where representation is below 80%. i very much doubt that DNO will make any radical changes to Faroe, except from some board changes, and future reduction in dilution to management.
So it should not be so controversial that they will get all other shareholders against them at GM, maybe even some support.

I believe the most important thing for DNO regarding the 50% treshold is that if above 50%, Faroe can be included in DNO P&L statements.
If they have to wait for a year for this to happen that is a pity, but no disaster.

[thedudie] 21/12/2018 10:36

Don't agree ... a few hundred thousand traded at below the bid isn't going to change anything. DNO need the big holders to sell and we won't know their view until Jan 3rd (is it?)
td

[redartbmud] 21/12/2018 09:47

The share price quote is 151.2p - 151.4p.
Looks like game set and match.

[binarypilot] 21/12/2018 09:43

Ithaca was approached regarding bid in the 180p to 200p area.

It was rebuffed and Ithaca ended up down at 35p.

Eventually recovering to be taken out at 120p.


Just sayin'

[bountyhunter] 20/12/2018 22:54

And from me, how many times!!!!!!

[ed 123] 20/12/2018 22:38

(Silent scream)

I can do no more. Going to bed. 'Night, all!

[bountyhunter] 20/12/2018 22:25

Vb, that's exactly what I said re percentages and quoted from the takeover code (twice). It was Ed that posted that the offer would go 'unconditional' at above 30% not 50% so I think you are addressing the wrong person.

[vikingbhoy] 20/12/2018 22:24

Bh, over 50 percent they can declare their current offer unconditional. Over 30 they have to launch a mandatory bid. The current offer is not a mandatory bid and therefore not unconditional as of now until they get above 50

[bountyhunter] 20/12/2018 22:14

I'll stick with the takeover code thanks :-)

[ed 123] 20/12/2018 22:14

That's ok, Bountyhunter. No problem. I am happy with my understanding. :-)

[thegreatgeraldo] 20/12/2018 22:13

Cross purposes here I think. The offer is a conditional offer, IE, there are various conditions attached.

[bountyhunter] 20/12/2018 22:10

I'll stick with the takeover code which is perfectly clear that the percentage is above 50% not 30% for an offer to be declared unconditional. I think you are getting confused between offers becoming mandatory and unconditional.

The takeover code:

30 per cent. or more will give rise to a mandatory bid requirement

More than 50 per cent. power to appoint/remove directors
offer can be declared unconditional

[ed 123] 20/12/2018 22:03

Yes, if they go above 30% by buying in the market. No, if they go above 30% but under 50% counting shares tendered in the formal offer.

[bountyhunter] 20/12/2018 21:57

Ed, you said the offer would be unconditional above 30%, actually it's above 50% as in the takeover code.

Ed 12320 Dec '18 - 18:59 - 1735 of 1754
0 1 0
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.

[ed 123] 20/12/2018 21:54

Bomfin. I am not a financial advisor and I am not advising anything to anyone.

Still holding and thinking about it. The results of the two current wells could make a difference - if released before holders need to vote.

Bountyhunter. Thanks but I already knew that. No offence intended. Genuinely don't know why you objected to what I wrote.

[bountyhunter] 20/12/2018 21:49

Ed:

30 per cent. acquisition of 30 per cent or more will give rise to a mandatory bid requirement

More than 50 per cent.
power to appoint/remove directors
offer can be declared unconditional

75 per cent. + required majority of voted shares to approve a special resolution / approve a Scheme

90 per cent. (of shares to which offer relates)
power to compulsorily acquire or "squeeze out" shares held by non-assenting minority shareholders

[bomfin] 20/12/2018 21:49

NP Ed. I am advising people to stick. People should though do their own research! and make their own decision. I also am not a financial advisor.

[ed 123] 20/12/2018 21:42

I'm not giving financial advice; never do.

What's your interpretation?

[bountyhunter] 20/12/2018 21:34

Ed you say above 30% it's unconditional but I agree with hashertu who actually said above 50%.
Also you should be careful about giving out financial advice to other posters on a bulletin board, are you a qualified financial advisor?

[ed 123] 20/12/2018 21:29

You could accept the offer at 152p and buy some cattle? The shares are only worth what a buyer and a seller can agree. No other buyer for Faroe emerged. Brent crude at $54. 152p is a chance to exit.

[bomfin] 20/12/2018 21:23

North of Manaus. I sold up and bought a farm. Still holding FPM. Worth double the offer imho. Fenja was dissapointing but Iris Hades could have significant upside.

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

You at Manaus?

Iris/Hades was already included by DNO in arriving at their 152p offer.