Dragon Oil shares soar following €5.1bn buyout offer
Shares in Irish-listed Dragon Oil hit a record high yesterday as the firm's board recommended an offer from Emirates National Oil Company valuing the oil explorer at €5.1bn.
ENOC, which holds a 54pc stake in Dragon, made an initial offer of 650 pence per share in March to buy the shares in the company that it does not own.
ENOC's board and an independent committee of the board of Dragon Oil have now reached an agreement on the cash offer.
Dragon Oil said ENOC had increased its offer to 750p in cash per share, up from an offer of 735p in May.
Shares in the firm rose by as much as 9.6pc to 734 pence on the London Stock Exchange yesterday.
The deal is subject to approval from a majority of Dragon's minority shareholders and will be financed through ENOC's existing cash resources. Dragon Oil will be delisted from the London and Irish Stock Exchanges on completion of the deal.
Speaking to the Irish Independent, a spokesman for Dragon said that an offer document providing further detail on the deal will be sent out to minority shareholders within 28 days of the announcement.
After the document is sent out shareholders will have a minimum of 21 days to decide whether to sell or not. The deal has to be declared unconditional within 81 days of the offer document being published.
The spokesman said that Dragon has been in contact with its minority shareholders regarding the deal, although he said the nature of the discussions are confidential.
He added that "the independent committee think it is a fair and reasonable offer".
ENOC's offer values Dragon Oil at around £3.7bn (€5.1bn). One of the possible beneficiaries of the deal is Setanta Asset Management, a subsidiary of Irish Life's Canadian parent company Great-West Lifeco.
The firm has a stake of just over 3pc in Dragon that would be valued at more than €150m.
The move by ENOC to secure full ownership of Dragon comes five years after the failure of a similar attempt by the controlling shareholder to buy out the company's minority investors at 455p a share.
Dragon Oil is registered in Ireland and listed on the Irish Stock Exchange while its headquarters is in Dubai.
The focus of its operations is in Turkmenistan. In 2009, Dragon was dragged into controversy when it was forced to admit that some staff had accepted bribes following an internal investigation conducted by KPMG.