JP Morgan failed to reveal Dragon deals in buyout bid
Published 21/01/2010 | 05:00
JP Morgan failed to reveal 113 deals in Dragon Oil shares during an unsuccessful bid to buy the company last year, the Irish Takeover Panel said yesterday.
The deals took place as Emirates National Oil Company was trying to buy Dragon which has a market value of €2.58bn, the panel said. JP Morgan Asset Management (UK) should have reported each trade to the stock exchange but failed to do so because of a clerical error.
The failure to report deals lasted from June to December after the company went into an offer period. There is no suggestion that Dragon is to blame for the mistake.
Turkmenistan-focused Dra-gon went into an offer period after receiving an approach from its majority shareholder, the Dubai-based Emirates National Oil Company, which owns 51.5pc of Dragon's shares.
The offer was backed by Dragon's committee of independent directors and proxy adviser RiskMetrics, but was eventually rejected by shareholders. The bid needed approval from 75pc of minority investors.
The takeover panel noted yesterday that many of Dragon's army of small shareholders were known to be opposed to the takeover while several institutional shareholders, including Baillie Gifford, planned to vote against the acquisition. This made information on share dealing very important for investors.
"There was some degree of uncertainty as to whether the acquisition would receive the level of shareholder support necessary to effect the acquisition. Given the circumstances, dealing disclosures were particularly important for investors and especially during the three-week period leading up to the shareholder vote," the panel said yesterday.
The takeover rules require investors holding more than 1pc of a company's shares to disclose all dealings during an offer period by 3.30pm on the business day after the transaction.
JP Morgan only disclosed the hundred-plus dealings on December 8 with a retrospective disclosure from June 5 when the investment bank revealed it held a 4.24pc interest in Dragon.
No sanctions will be taken against JP Morgan.