Investor calls for seats on board of Faroe

Aberdeen-based oil and gas firm Faroe Petroleum yesterday hit out at what it described as a shareholder's attempt to take control of the company on the cheap.

Graham Stewart, chief executive of Faroe Petroleum

Norwegian energy firm DNO, which owns just over 28 per cent of Faroe, has requisitioned a meeting of Faroe’s shareholders in an attempt to get its chairman and managing director seats on the board. In a strongly worded response, Faroe’s board said it was “very concerned” by DNO’s action.

Faroe said the move was part of an “undisclosed strategy” by DNO and its chairman to “try and gain control of Faroe’s business without making an offer to all shareholders at an appropriate premium”.

Faroe pointed out that it has a number of other energy industry shareholders on its board including Perth utility SSE and that none has had representation on the board.

“A significant number of Faroe’s major institutional shareholders have provided clear guidance that they do not wish DNO to be represented on the board,” it added.

Faroe said it was now looking into whether the requisition is valid but stressed it intends unanimously to recommend that shareholders vote against the proposed resolutions.

News of the move came as DNO released first half results yesterday in which it referred to its indirect interests in North Sea assets through its strategic stake in Faroe.
“Given the size of its shareholding, DNO will request seats on the board and has asked for an extraordinary general meeting to be called for this purpose,” it said.