DNO yesterday revealed it had taken a controlling stake in Faroe, as acceptances of its improved 160p per share offer passed 52.44%, then this morning the latest stock market statement confirmed that it now had 72.8%.
“Faroe’s board finally threw in the towel yesterday … verbal sparring had continued between the pair over the festive period and into the New Year, with buying taking DNO’s existing stake to over 30% and making its original 152p offer mandatory before it opted to increase this and set a final closing date,” Cantor analyst Ashley Kelty said in a note.
He added: “While we agree with Faroe’s board that the offer remains low - our updated valuation implies over 20% upside – weak recent newsflow and market conditions have, perhaps unsurprisingly, swayed shareholders.
“Given the potential uncertainty over the company’s future under DNO’s control, we believe that shareholders should now tender their shares, and are bringing our target price in line with the offer, at 160p (from 195p).”
Faroe executive chairman Bijan Mossavar-Rahmani, in today’s statement, said: "The majority of Faroe's shareholders have now spoken and the Faroe board has disclosed that its members, too, will accept DNO's offer in respect of their own holdings.
“We also note, and appreciate, the intent of Faroe's board to work with DNO to ensure an orderly transition of control of the company. That is indeed in the interest of all stakeholders.”