Oslo-listed DNO has withdrawn a request for a meeting to gain seats on Aberdeen-based Faroe Petroleum’s board, criticising the firm’s “increasingly hostile response”.
Nearly two weeks ago the Norwegian firm requested a shareholder meeting in order to approve seats for its executive chairman Bijan Mossavar-Rahmani and managing director Bjorn Dale.
However, Faroe urged its shareholders against this, saying it was “very concerned” by DNO’s actions to “take control of its business”.
Earlier this year DNO acquired a 28% stake in Faroe, leading to analysis that it is looking to take over the Aberdeen firm.
DNO has now withdrawn its request for a shareholder meeting to approve the seats, condemning Faroe’s “disdainful attitude”.
The firm is now considering its position on next steps.
In a statement, it said: “DNO ASA withdraws the request for an Extraordinary General Meeting to consider its representation on Faroe Petroleum plc’s board of directors and notes with deep disappointment Faroe Petroleum’s repeated peremptory and disdainful attitude to such representation for, and therefore greater engagement with, its largest shareholder.
“DNO requested a meeting of shareholders to seek suitable representation on the board of directors of Faroe Petroleum and to raise concerns and dismay about the wider governance culture and shareholder value strategies of a company in which DNO has made a very substantial investment.
“Now that DNO has highlighted these matters via an Extraordinary General Meeting notice and given Faroe Petroleum’s increasingly hostile public response on 16 August 2018, DNO will not pursue a meeting of shareholders at this time while it considers its position.
“Meanwhile, DNO hopes that Faroe Petroleum’s directors will initiate without further delay a constructive dialogue with DNO, as they should with any large shareholder, on corporate governance culture and shareholder value strategies, including board composition.”
DNO acquired the interest in Faroe in April, purchasing the shares at £1.25 each which Faroe said “undervalued” the company and its prospects.
The Norwegian company published a “no intention to bid” statement” which means it needs to wait at least six months before crossing the 30% ownership threshold under the UK’s takeover code.
Following DNO’s initial announcement that it was seeking seats on the board, Faroe said it “would not serve the interests” of the company, and said it was “very concerned”, urging shareholders to take no action.
At the time, Faroe said in a statement it belives the move is “wholly self-serving and part of an undisclosed strategy on DNO and Mr. Mossavar-Rahmani’s part to try and gain control of Faroe’s business without making an offer to all shareholders at an appropriate premium”.
DNO firm returned to North Sea operations last year, following a six-year hiatus to focus on its Middle East operations.