Enoc’s increased offer for Dragon Oil values firm at €5.7bn

Emirates National Oil Co (Enoc) has increased its offer to buy Irish-listed explorer Dragon Oil to 800 pence a share, valuing the business at £4 billion (€5.7 billion).

The increase has secured support from minority shareholders in Dragon, including billionaire Paul Singer’s Elliott Advisors UK which had rejected Enoc’s offer in June.

Elliott and Baillie Gifford, which hold a combined 13.1 per cent stake in Dragon Oil, have accepted the new price, Enoc said.

The Dubai-based company said it planned to delist Dragon Oil, now valued at £4 billion, from the London and Dublin exchanges, as it now controlled almost 84 per cent of the shares, comprising its own 53.9 per cent stake, acceptances from other shares representing 16.82 per cent of the company and the irrevocable undertakings from Elliott and Baillie Gifford.

"We look forward to taking operational control of Dragon Oil and integrating the company into the Enoc Group, moving another step closer towards creating a fully integrated oil and gas company," said Enoc group chief executive Saif Al Falasi said.

Enoc had offered to buy the 46 per cent of Dragon Oil it didn’t previously own for 750 pence a share, or £1.7 billion on June 15th. It had originally offer 735p a share in May.

Unconditional

Enoc’s new offer is unconditional and final, according to the statement. Given its existing shareholding, the deal will cost Enoc £1.9 billion.

Shares of Dragon Oil rose 1.5 per cent to 733 pence on Friday in London. They have gained 44 per cent since March 13th, the business day before the takeover talks with Enoc were disclosed.

Revenues at Dragon Oil rose to $1.1 billion last year, despite lower prices. Pre-tax profits dipped by 15 per cent to $589 million. The company had said it was targeting annual production growth of about 10 per cent or more this year at 100,000 barrels of oil per day.

Enoc has set August 28th as the closing date for acceptance of the offer by holdout investors. – (Bloomberg)