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Dana rebuts KNOC bid, says worth much more
LONDON (Reuters) - Dana Petroleum DNX.L rejected a hostile 1.67 billion pound ($2.57 billion) bid from Korea National Oil Corp (KNOC) KOILC.UL on Wednesday, citing an independent valuation that said the UK explorer was worth considerably more.
Dana also unveiled the acquisition of North Sea assets from Canada's Suncor (SU.TO) for 240 million pounds, saying this supported the case for KNOC raising its bid as the independent experts said the assets were really worth 368 million pounds. Last month state-controlled KNOC made its 1,800 pence bid direct to Dana's shareholders after failing to convince Dana management to recommend its bid.
Dana said independent experts it hired to value the company said it was worth 2,120 pence to 2,465 pence, based on existing assets and over 3,000 pence if one assumed success in its exploration plans.
"This whole issue is around value and value for all our shareholders and that's the only goal of the Dana management team," Dana Chief Executive Tom Cross said on a conference call with reporters.
Cross said that the valuation reached by the independent experts was based on information about its 100 plus licenses in the North Sea and Egypt which had not previously been made public and to which KNOC had not had access.
When asked what level of offer management would accept, Cross would not comment, but said the company wanted to have a "proper value discussion" with KNOC and would on Wednesday reiterate its invitation to the Koreans to talk.
He would not comment on whether the company had received any other approaches.
KNOC declined immediate comment on the statement.
Dana's shares were up 0.1 percent at 1,809 pence by 0900 GMT, compared with the FTSE All Share index .FTAS which was down 0.5 percent. That price suggests investors do expect a small increase in KNOC's bid.
"It is hard to see KNOC raising its offer to Dana's level of expectations," said Evolution analyst Richard Griffith.
Reuters first reported last month Dana was near to a deal to buy the Suncor assets after Dana said it had told KNOC of "significant, well advanced, non-public and valuable," business development activities.
Dealers said the fact that KNOC had inside information about Dana meant it was unable to buy Dana shares in the open market, something the Korean company can do now that the Suncor deal is public.
"As it is now free to buy Dana stock in the market KNOC may choose to raise its price modestly in order to push its holding over the 50 percent threshold," said Griffith, referring to the 49 percent of shareholders who KNOC said had submitted letters of intent to accept its offer in August.
Korea gave KNOC a $6.5 billion war chest this year to compete with energy-hungry Asian state firms looking to secure supplies for their growing economies.
The company has a target to raise the nation's production capacity to 300,000 barrels per day (bpd) by 2012 from 130,000 bpd in December.
Chinese and Indian firms have so far outgunned KNOC, which explores and stores oil, in bigger merger and acquisition battles.
(Additional reporting by Sarah Young; Editing by Sharon Lindores)
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