Emirates National Oil Co., Dubai’s government-run refiner, offered to buy the rest of Dragon Oil Plc for about $1.15 billion to tap deposits in Turkmenistan and make up for dwindling supplies and meet rising demand at home.
The bid by Emirates National, known as ENOC, of 455 pence a share for the 48.5 percent of the Dubai-based explorer it doesn’t already own is 35 percent higher than Dragon Oil’s closing share price on June 3. Two days later, ENOC said it was considering an offer at a “modest premium.” Dragon Oil surged the most in London trading since it was first approached.
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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