We have to talk, Dana boss tells Koreans

Published on Tuesday 7 September 2010 21:39

TOM Cross, the chief executive of Dana Petroleum, last night issued a plea to the firm's Korean hostile suitors to meet the board of the Aberdeen-based company to negotiate a better price.

• Tom Cross , CEO of Dana Petroleum

Yesterday, Dana made an impassioned defence of the firm's value, revealing an independent report that said the UK explorer was worth considerably more than 1.87 billion, the current offer on the table which Dana has already rejected as "inadequate".

The firm also unveiled details of a 240 million acquisition of North Sea assets which the board argued would make Dana a "much stronger business".

The Korea National Oil Corporation (KNOC) did not comment on the documents yesterday but it is understood that the government-owned company intends to stick to its 18 a share offer.

It will argue that Dana offered no new information, ruling out one of the circumstances under which it is allowed under Takeover Panel rules to revise its bid upwards.

Analysts said KNOC might have to raise its bid to match the firm's share price, which last night closed at 1,809p. But Dana is likely to hold out for 1,825p despite arguing the firm is worth between 2,120p to 2,465p.

Cross last night said shareholders he had spoken to had welcomed the firm's defence but did not confirm the number of shareholders that might be willing to hold out for a better price.

A spokesman for KNOC confirmed that bidders had received letters of intent from almost 49 per cent of Dana shareholders to accept the 18 price.

But Cross dismissed the letters as "not worth the paper they are written on".

Cross said: "I have written to the Koreans this morning with the documents and said 'please have a look at these'. The door is open and we are open for dialogue as we always have been.

"We only have one goal which is to maximise value for my shareholders," he added.

Cross, who founded the firm in 1994, has come under criticism for holding out against shareholders and analysts who have urged him the accept the Koreans' offer.

He admitted that the firm risked losing the deal - and seeing a collapse in the firm's share price as a result - by insisting on a higher price but he believes the Koreans won't walk away.

"That wouldn't make sense. They have an acute strategic need for oil and gas. Why would they walk away from Dana if they are so close to getting it?"

He added: ""We are not brainless idiots.

"What we have done is locked in a minimum of 18 for our shareholders.

"But Dana is a very valuable company. That is not my opinion, that is the opinion of some of the world's leading independent reserve engineers.

"It is not brinkmanship, it is analysis of an asset-based business."

Dana yesterday unveiled a 52 page defence document entitled Reject the KNOC offer and advised shareholders to "do nothing" and not complete forms of acceptance agreeing to KNOC's 18 offer.Dana pointed out shareholders have until 14 October to decide whether or not they accept the 18 offer.