Terry Murden: Dana's Cross may be about to admit defeat as Koreans hover

Published on Tuesday 7 September 2010 22:32

TOM Cross has put up a brave fight to hang on to his oil business, but it now looks like his only hope is getting the best possible price from his suitor.

Shares in Dana Petroleum barely moved yesterday in response to the chief executive's claim that the firm he founded is worth at least an extra 4 per share. He'll be lucky to extract anything like that figure, whatever an independent firm of analysts tells him.

The Korea National Oil Corporation (KNOC) has another week to decide whether to keep the offer open, raise the price or let it lapse and has already stated it will only lift the price if there is a rival bid, some material new information emerges, or the Dana board agrees to a revised price.

At best, Cross might persuade KNOC into a small uplift - 1,825p has been suggested as a price he and the board would accept.

There has to be some sympathy for Cross who has built a substantial company and feels there is much more to achieve without outside interference.

Yesterday's defence document came with an expected acquisition which strengthens his case, not only because it goes some way to underpinning his valuation but also means KNOC would be getting the added extras for free unless it throws in a few more coppers.

KNOC argues that its offer price is already a near-60 per cent premium to the closing price of Dana shares on 30 June, the day before Dana revealed it had received an approach.

That is generous by the standards of most takeover bids, so it is no wonder that some Dana shareholders believe that squeezing more out of the Koreans looks a little greedy. Cross says that if this was only about personal gain he could have walked away with many times his salary when KNOC first revealed its hand.

Whether the haggling over Dana lasts the full 60 days of the bid timetable must be in question, given the City's view that the Koreans will win in the end. With letters of intent from almost half the shareholders, a few extra pence should be enough to shift control from Aberdeen to Seoul.

Stage one may have spared Scotland but more is to come

AEGON made the first of a two-stage announcement on its restructuring yesterday and so far the impact on Scotland is minimal.

Streamlining sales offices will help the company meet the requirements of the newly-shaped advisory market. But as part of a wider-ranging review of the business it is just the start.

The big statement on the future will be delivered at the end of this month and will be a lot more painful. Chief executive Otto Thoresen and his senior lieutenant Adrian Grace are preparing their plans that will send another shockwave through Edinburgh.All concerned can only hope that there are fewer bullets than we've been led to expect.

But some life sector analysts believe this may not be the end of the story for Aegon. The company has found itself in deep water, reshuffling its top team and its product offering under orders from its Dutch parent to sort itself out.

With consolidation in the air, getting its balance sheet in better shape could rekindle interest from would-be buyers.

What's in a name? Well, quite a lot it turns out - ask 'Consignia'

DSG shareholders have voted to restore the company's name to Dixons, a brand familiar with the public for more than 70 years. Its more recent incarnation has been around for only five years and was clearly unloved.

But Dixons name won't be reappearing in the high street. Dixons remains an online retailer, and the group operates as PC World and Currys on the high street, which will remain under the same brands.

This is, however, the latest in a series of U-turns over rebranding. Everyone recalls the infamous renaming of Royal Mail as Consignia as possibly the daftest.

Initials seem to be particularly troubled by change. I can't help wondering why Royal & Sun Alliance dropped its venerable name for RSA which has the added disadvantage of being used by others: Royal Society of Arts, even regional selective assistance.

Royal & Sun Alliance surely encompasses all the sentiments one would seek in an insurance company: warm, long-standing, and traditional.

As for LV= (formerly Liverpool Victoria) … equals what?

Name changes are brave moves for any organisation, particularly ones with long histories. Some do seem to get away with it. Aviva has managed to pull off the decision to drop Norwich Union, though only after spending a chunky sum advertising the change.

Whether it was worth the effort and the cost is another matter.