DNO shareholder seeks to block RAK takeover
Oslo, December 12, 2011
A disgruntled shareholder group has sought a court injunction to block Norwegian oil company DNO's takeover of Emirates-based RAK Petroleum, a legal maneuver analysts said had little chance of success.
DNO, whose primary assets are in Iraqi Kurdistan, called the injunction request in Oslo District Court a "frivolous attack" and said it planned to close the deal in January.
Its shareholders approved the all-shares acquisition by a 3 to 1 vote margin on November 1, after which RAK shareholders gave their overwhelming approval.
DNO said the injunction request was filed by Petrolia Invest, a company controlled by former DNO Chairman Berge Gerdt Larsen, who has long argued that DNO was overpaying for RAK's Middle Eastern and North African assets.
First Securities analyst Teodor Sveen Nilsen, who has a buy recommendation on DNO, dismissed the latest action as "more noise" in a waning anti-merger campaign.
"As the majority of shareholders at both extraordinary general meetings voted for the merger, and given Petrolia's history of somewhat frivolous conduct in regards to recent events, we believe the request will carry little weight in the Oslo District Court," Nilsen said in a research note.
DNO shares were up 0.9 percent, outperforming a 1.9 percent fall in the OBX index.
Under the deal RAK is to receive $250 million worth of DNO shares valued at 9.50 Norwegian crowns per share.
That would increase RAK's stake in DNO to more than 40 percent from today's 30 percent, though RAK pledged to return to 30 percent by the end of 2012 after some DNO shareholders had complained it would have too much power in the merged company. – Reuters