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South Korea launches £1.87bn hostile bid for Dana Petroleum

South Korea is looking to boost the stability of its oil reserves.

Korea National Oil Corp (KNOC) of South Korea has announced it will directly approach the shareholders of Aberdeen-based Dana Petroleum, in a hostile takeover bid worth £1.87bn.

The move comes after KNOC's first takeover offer was rejected by Dana's board earlier this month. The board has refused to recommend KNOC's £18-a-share offer, which is a 59 per cent premium over Dana's closing price on 30 June - the last business day before KNOC declared its bid.

Dana's shareholders, including investment companies Schroders, BlackRock and JP Morgan, are known to be putting pressure on the company board to accept the offer. KNOC claims the support of more than 48 per cent of Dana's investors.

The state-owned Korean company, which is seeking at least 90 per cent of Dana's shares, hopes the takeover would boost South Korea's oil reserves. It expressed its disappointment at the refusal of the offer by Dana's board, which it believed represented "a full and fair value for the company".

Dana management had last month stated that KNOC's offer did not take into account certain developments that had not been made public so far, but which were set to increase Dana's oil production and reserves, reports the BBC.