Second fund balks at €5bn Dragon Oil offer
Published 07/07/2015 | 02:30
The third biggest shareholder in Dragon Oil says a £3.7bn (€5.2bn) takeover offer for the company is too low.
In a statement, Setanta Asset Management said an offer from Dragon's biggest shareholder - Emirates National Oil Company Ltd (ENOC) - to buy the stake in the business that it does not already own for 750 pence a share "significantly undervalues the company".
Clients of Ireland based Setanta Asset Management own 3.1pc of London and Dublin stock markets listed Dragon Oil, making it the third biggest shareholder in the business after ENOC and asset management company Baillie Gifford.
Baillie Gifford has already said the ENOC offer was not high enough.
"We encourage ENOC to consider an increased offer that would more reasonably reflect the long-term value of the business," Setanta said yesterday.
Setanta's statement was issued after ENOC's chief executive Al Falasi said the 750 pence offer is an "excellent opportunity for minority investors in Dragon Oil to realise a healthy return," in an article yesterday in The National, an Abu Dhabi-based newspaper.
Last week ENOC said it was progressing with its £1.7bn (€2.4bn) purchase of the 46pc of Dragon Oil shares it does not already own.
ENOC published its offer document last Wednesday, and shareholders have until 2pm on July 30 to agree to the terms.
On June 15, Dragon Oil's board agreed to recommend ENOC's offer to buy out minority shareholders after the price was increased from an initial offer made in May that had been rejected. The offer values the entire group at about £3.7bn (€5.2bn).
ENOC is owned by the government of Dubai and failed to buy Dragon Oil in 2009 after minority shareholders rejected a bid. Shares in Dragon Oil closed at 732 pence yesterday.