Business NEWS
Emirates National Oil Company ENOC to buy remaining Dubai-based Dragon Oil
By Germaine Lombardo for CEOWORLD Magazine Updated:November 2, 2009
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Dubai-based, Dragon Oil Plc (LON:DGO) (PINK:DRAGF) said it reached an agreement with its majority shareholder Emirates National Oil Company Limited LLC, or ENOC. whereby ENOC will buy the remaining shares of Dragon Oil not owned by it for about GBP 2.357 billion.
Emirates National Oil Company already holds 51.5% of Dragon Oil (DGO.I) (DGO.L), having first acquired a stake in 1998.
The offer price “will provide the minority shareholders of Dragon Oil the opportunity to realize a cash exit at a significant premium of 34% to the closing price of 338 pence per Dragon Oil Share on June 3,” the companies said.
Dragon Oil announced that it had received an approach in relation to a possible offer on June 4.
“The offer from ENOC allows our minority shareholders the opportunity to crystallize cash value at a significant premium to the level at which the company’s shares were trading prior to the ENOC approach” said Nigel McCue, chairman of the independent committee of Dragon Oil.
ENOC is seeking overseas assets to expand into oil and natural-gas production, which made up about 5.5 percent of Dubai’s $62 billion economy in 2007. Peter Hutton, a London- based analyst at NCB Stockbrokers Ltd., said investors should reject the offer because the financial crisis in the emirate is hampering ENOC’s ability to offer a fair price.
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