Korea firm launches £1.7bn Dana takeover bid

Korea National Oil Corporation (KNOC) will take its proposal direct to shareholders in Dana Petroleum but has not increased its offer from the approach of 1800p a share rejected by the Aberdeen-based firm last week.

However it said today that it had already received letters of support from 48.6 per cent of Dana investors to sell their shares.

Dana has refused to open its books to KNOC without a confidentiality agreement and argued the current bid failed to recognise so-far undisclosed developments which could "materially increase" its oil production and reserves.

More than three-quarters of Dana's production portfolio is based in the North Sea. The firm has made recent finds in the Blackbird field in the North Sea as well as in Egypt since KNOC's interest emerged, while it also has an ongoing drilling programme off the Faroe Islands.

KNOC's interest in Dana is part of a drive to snap up foreign energy resources and secure South Korea's future energy supplies, as well as to compete with the national oil companies of China and India.

The offer for Dana values the company at a premium of almost 60 per cent to its closing share price prior to it announcing it had received a takeover approach. Shares were up by six per cent today to 1789p.

KNOC senior vice-president Dr Seong-Hoon Kim said the company was disappointed by the response of Dana and said it was left with no alternative but to take its offer directly to shareholders.

He added: "We believe that our offer of 1800p per share fully and fairly reflects all of Dana's recently announced and ongoing developments, together with its exploration potential."