DNO's Faroe Offer Unconditional, Intend to DE-List

Source Press Release
Company DNO ASAFaroe Petroleum plc 
Tags Corporate Deals, Deals, Upstream Activities
Date January 14, 2019

DNO ASA ("DNO"), the Norwegian oil and gas operator, is pleased to announce that, following the settlement of the market purchases of Faroe Shares that DNO made on 9 January 2019, the Final Offer became unconditional in all respects on 11 January 2019. As anticipated in the Final Offer Document, if it acquires over 75 percent of the issued share capital of Faroe, DNO intends to initiate the process for the cancellation of trading in Faroe securities on AIM.

DNO announced its final cash offer for the entire issued and to be issued share capital of Faroe Petroleum plc ("Faroe") at 160 pence in cash for each Faroe Share (the "Final Offer") on 8 January 2019 and published the final offer document on same day (the "Final Offer Document"). On 9 January 2019, Faroe announced the Faroe Board's recommendation of the Final Offer.

On 11 January 2019, Faroe announced the vesting of management and employee share options and awards under the Faroe Share Schemes which increased the ordinary issued share capital of Faroe to 395,942,468 Faroe Shares from 372,889,693 Faroe Shares in issue (an increase of 6.18 percent). Accordingly, DNO has calculated its ownership of Faroe Shares, and acceptances of its Final Offer, as set out in this announcement, based upon the increased share capital, which is now fully diluted.

On 11 January 2019, Faroe also announced that the three Executive Directors have given three months' notice of termination of their employment with the Company. In addition, the Executive Directors stated their intention to resign from all directorships and other offices which they hold with Faroe and all of its subsidiaries as soon as is practicable, with the intention of remaining as directors until such time as replacements are appointed, to ensure an orderly transition, but in any event at the latest by the end of their three month notice periods.

Faroe Shareholders who have not yet accepted the Final Offer are encouraged to do so and will receive the consideration for their Faroe Shares within 14 days of receipt of the acceptance.

The revised offer document and form of acceptance relating to the Final Offer (the "Final Offer Document" and "Final Form of Acceptance", respectively) were published on 8 January 2019 and are available on DNO's website at https://www.dno.no/en/investor-relations/offer_announcement_26November.

Level of acceptances and interests in relevant securities

As at 5.00 p.m. (London time) on 11 January 2019, DNO had received valid acceptances of the Final Offer in respect of a total of 54,482,764 Faroe Shares representing approximately 13.76 percent of the issued share capital of Faroe. So far as DNO is aware, no acceptances have been received from persons acting in concert with DNO.

DNO owns 200,550,523 Faroe Shares (representing 50.65 percent of Faroe's issued share capital), which have settled.

Accordingly, the total number of Faroe Shares which DNO may today count towards the satisfaction of the acceptance condition set out in Part A of Appendix 1 of the Final Offer Document (the "Condition") is 255,033,287 Faroe Shares (representing approximately 64.41 percent of the issued share capital of Faroe).

The Final Offer has therefore become unconditional in all respects.

In addition, DNO owns 38,636,331 Faroe Shares (representing 9.76 percent of Faroe's issued share capital) which remain subject to settlement (expected to occur on or before 15 January 2019).

Accordingly, DNO has now acquired or agreed to acquire (through acceptances or pending settlement) 293,669,618 Faroe Shares, in aggregate representing approximately 74.17 percent of the ordinary issued share capital of Faroe.

Save as disclosed above, as at 5.00 p.m. (London time) on 11 January 2019, neither DNO nor, so far as DNO is aware, any person acting in concert with DNO had:

·     any interest in, or right to subscribe in respect of, or any short position in relation to Faroe relevant securities, including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of Faroe relevant securities; or

·     borrowed or lent any Faroe relevant securities (including any financial collateral arrangements), save for any borrowed shares which have been either on-lent or sold.

Furthermore, no dealing arrangement (of the kind referred to in Note 11 of the definition of "acting in concert" in the Code) exists between DNO (or, so far as DNO is aware, any person acting in concert with it) and Faroe in relation to Faroe Shares. For these purposes, a dealing arrangement includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to Faroe Shares which may be an inducement to deal or refrain from dealing in such securities.

The references to the issued share capital of Faroe above are based on a figure of 395,942,468 Faroe Shares in issue on 11 January 2019. Of this figure, 23,052,775 Faroe Shares were reported by Faroe to have been issued on 11 January 2019 and are subject to an application for admission to trading on AIM.

Extension of the Final Offer

The Final Offer will remain open for acceptance until further notice. At least 14 days' notice will be given before the Offer is closed.

Faroe Shareholders who have not already accepted the Final Offer are encouraged to do so without delay in accordance with the following procedures:

·     acceptances of the Final Offer in respect of certificated Faroe Shares should be made by completing either the first form of acceptance which accompanied the First Offer Document (the "First Form of Acceptance") or the Final Form of Acceptance as soon as possible;

·     acceptances of the Final Offer in respect of uncertificated shares should be made electronically through CREST (an "Electronic Acceptance"). You are reminded that, if you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.

If you have any questions about the Final Offer or are in any doubt as to how to complete the First Form of Acceptance or the Final Form of Acceptance or the making of an Electronic Acceptance (as the case may be), please contact Equiniti Limited on 0333 207 6399 or +44 121 415 0973 (if calling from outside the UK). Lines are open from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (excluding English and Welsh public holidays).

The Final Offer Document and Final Form of Acceptance were published on 8 January 2019 and are available on DNO's website at https://www.dno.no/en/investor-relations/offer_announcement_26November.

Settlement

The consideration due to accepting Faroe Shareholders is expected to be despatched either on or before 25 January 2019, in respect of acceptances complete in all respects and received not later than 5.00 p.m. on 11 January 2019, or within 14 days of the date of receipt of further acceptances which are valid and complete in all respects.

Cancellation of trading and re-registration

If, by virtue of its shareholdings and acceptances of the Final Offer (or deemed acceptances thereof) DNO acquires, or agrees to acquire, issued share capital carrying 75 percent or more of the voting rights of Faroe, DNO intends to procure that Faroe makes an application, subject to the requirements of the London Stock Exchange, for the cancellation of the admission to trading of Faroe Shares on AIM.

Following the cancellation of trading of the Faroe Shares on AIM, Faroe will be re‑registered as a private limited company under the relevant provisions of the Companies Act.

The cancellation of trading of Faroe Shares on AIM and the re-registration of Faroe as a private limited company will significantly reduce the liquidity and marketability of any Faroe Shares not assented to the Final Offer at that time. Any remaining Faroe Shareholders would become minority shareholders in a majority controlled private limited company and may therefore be unable to sell their Faroe Shares. There can be no certainty that Faroe would pay any further dividends or other distributions or that such minority Faroe Shareholders would again be offered an opportunity to sell their Faroe Shares on terms which are equivalent to or no less advantageous than those under the Final Offer.

Compulsory Acquisition

As anticipated in the Final Offer Document, if DNO receives acceptances under the Final Offer in respect of, or otherwise acquires, 90 percent or more of the Faroe Shares to which the Final Offer relates, DNO intends to exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the remaining Faroe Shares in respect of which the Final Offer has not been accepted.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd