KNOC refuses to raise offer for Dana but leaves the door open

State-run Korea National Oil Corp (KNOC) yesterday ruled out raising its £1.87 billion bid for Dana Petroleum while leaving the door open to a higher offer if Dana's board agreed to a deal.

Chief executive Kang Young-won said: "We believe our offer values Dana fairly and fully and have no plan to consider raising it."

The firm was compelled to issue a statement to the London Stock Exchange admitting that takeover rules meant it could increase the price if another bidder emerged or if Dana's board supplied "new information", or if the Dana board agreed to accept a higher bid.

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KNOC is awaiting Dana's interim results announcement on Friday which will allow it to buy a 29.9 per cent stake in the firm from shareholders at 18. Dana is saying nothing about plans to acquire the UK assets of Canadian oil firm Suncor which will add substantial value to the firm not reflected in the KNOC offer. It is expected Dana will acknowledge plans for the deal at the end of the week, raising inside information restrictions on KNOC which currently hamper it from buying shares.

KNOC is also urging Dana investors to confirm their backing for the deal. Currently 48.6 per cent of shareholders have signed letters of support for KNOC's bid but these are not legally binding. The firm wants to see 20 per cent of investors give formal acceptance of the bid.

KNOC yesterday outlined its ambitious plans for expansion and confirmed the South Korean government has given the oil company a $6.5bn warchest this year to compete with energy-hungry Asian state firms in a race to secure supplies.

But Kang said his focus remained on Aberdeen-based Dana. "We are looking worldwide for acquisitions but at the moment my focus is really on pulling this Dana deal through," he said.