Dragon Oil agrees to ENOC's increased takeover bid - Gulf Business
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Dragon Oil agrees to ENOC’s increased takeover bid

Dragon Oil agrees to ENOC’s increased takeover bid

Dubai-based ENOC’s offer values Dragon Oil at around $5.75bn

Dragon Oil Plc said it agreed to an increased takeover offer by Emirates National Oil Co (ENOC) after the Dubai-based group increased its offer to buy out the company’s minority shareholders.

Shares in Dragon Oil rose as much as 9.6 per cent to 734 pence on the London Stock Exchange on Monday morning.

Dragon Oil, which produces oil from the Cheleken field in Turkmenistan, said ENOC raised its offer to 750 pence per share in cash, which comes at a 12 per cent premium to the stock’s Friday close.

The deal would help downstream-focused ENOC become a fully-integrated global oil and gas company. Production at Cheleken is expected to plateau at a rate of 100,000 barrels of oil per day for the next five years.

ENOC’s offer values Dragon Oil at around 3.7bn pounds ($5.75bn). That would value the shares not already owned by ENOC at around 1.7bn pounds.

The potential deal would also require the approval of a majority of the minority shareholders.

Dragon Oil’s largest minority shareholder Baillie Gifford & Co, which has a 7.2 per cent stake in the company, was not immediately available for comment.

The board’s recommendation to shareholders would reduce the risk of the deal not going through, FirstEnergy Capital analyst Stephane Foucaud said.

“Given the acquisition history of Dragon, I think a lot of people were thinking that the risk here of the deal not taking place is quite material. Now with the board approval the risk of the deal not happening is less than it was before,” Foucaud said.

ENOC, which is owned by the government of Dubai, failed to buy Dragon Oil in 2009 after minority shareholders rejected a bid.

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