Talks break down in takeover bid for Dana

One of the UK's biggest oil and gas explorers was locked in a stand-off with its South Korean suitor yesterday after talks over a £1.7bn takeover broke down.

National oil company KNOC went public with a 1800p a share bid for Dana Petroleum in July, but the Aberdeen-based firm says the offer – which the Koreans have refused to increase – is not high enough.

Dana says the current bid fails to recognise so-far undisclosed developments at the firm which could "materially increase" its oil production and reserves.

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KNOC – pursuing Dana to boost its own overseas reserves – has so far said it will not lift its offer regardless of any new information and refused to sign a confidentiality agreement without a recommendation. It has also refused an offer by Dana to fly to Korea to argue the firm's case to the board.

Shares in Dana fell as hopes of a deal faded. Panmure Gordon oil and gas analyst Peter Hitchens said: "We appear to have a bit of a Mexican stand-off."

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.

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The company said it had made "every effort to encourage and assist" KNOC but warned: "The board does not consider it is prudent or warranted to provide a recommendation to any conditional, unsolicited proposal at this level."

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