ENOC takeover bid for Dragon Oil - confused ??
Discussion
Hi all,
I've got a handful of dragon oil shares, acquired around 20 years ago when some daft rumours were doing the rounds. I've received paperwork advising that ENOC have made a takeover bid which has been accepted by the board but not the shareholders, as yet.
The paperwork just seems to want my signature and return of the share cert for which I'll receive the offer price of 750p per share. The current share price is sitting around 735p, largely due to what's going on with the takeover bid.
I don't need the money right now and would prefer to retain the shares if that's an option. However, I can't find any indication in the reams of paperwork I've received of what happens if I don't simply bend over and accept the offer. Is anyone familiar with this sort of situation. Does anyone know what happens to my shares if I don't accept? Could I just lose them/my money?
Thanks for any help
I've got a handful of dragon oil shares, acquired around 20 years ago when some daft rumours were doing the rounds. I've received paperwork advising that ENOC have made a takeover bid which has been accepted by the board but not the shareholders, as yet.
The paperwork just seems to want my signature and return of the share cert for which I'll receive the offer price of 750p per share. The current share price is sitting around 735p, largely due to what's going on with the takeover bid.
I don't need the money right now and would prefer to retain the shares if that's an option. However, I can't find any indication in the reams of paperwork I've received of what happens if I don't simply bend over and accept the offer. Is anyone familiar with this sort of situation. Does anyone know what happens to my shares if I don't accept? Could I just lose them/my money?
Thanks for any help
If you want to know definitively just call Dragon Oil: +44 (0) 20 7647 7804 for Anna Gavrilova, Investor Relations.
But essentially what is happening is that the board are recommending the 750p offer.
And if you send them your shares that's most likely what you will get.
If you don't send them and the deal goes through, then they will delist the stock and you will still be able to claim 750p later on, the money doesn't just disappear.
However, there is a wrinkle. ENOC need 23% of holders to say yes.
If not, the deal - might - fall through.
Since you sent the shares in, you are clearly happy with 750p, so ENOC might keep your shares and send you that cash.
BUT - they may not, they can just call the whole thing off and give you your shares back.
That's why the shares are trading below 750p at 728p right now - there is still a small risk that the deal falls through.
So if you want to GUARANTEE 728p for your shares - just sell them in the open market right now.
The reason for the current discount is because 10%'s worth of holders (Baillie Gifford and Setanta) have said they won't subscribe to the deal.
There are 46% of shares NOT owned by ENOC. They want the majority of those (i.e. 23%) to say yes. And right now we know that 10% are saying NO. Hence we need 23% from that 36% remaining.
BG and Setanta are paying a slightly dangerous game whereby they believe fair value is well above 750p so either they want a higher offer or they are happy to wait for the share price to rise on its own up to their version of fair value.
Note that in my experience if ENOC didn't get enough agreement and noped the hell out of there, the share price would drop considerably, probably to around the 675p level it was at before this latest offer - but very possibly far below that.
IANAL and this isn't FCA regulated advice.
But essentially what is happening is that the board are recommending the 750p offer.
And if you send them your shares that's most likely what you will get.
If you don't send them and the deal goes through, then they will delist the stock and you will still be able to claim 750p later on, the money doesn't just disappear.
However, there is a wrinkle. ENOC need 23% of holders to say yes.
If not, the deal - might - fall through.
Since you sent the shares in, you are clearly happy with 750p, so ENOC might keep your shares and send you that cash.
BUT - they may not, they can just call the whole thing off and give you your shares back.
That's why the shares are trading below 750p at 728p right now - there is still a small risk that the deal falls through.
So if you want to GUARANTEE 728p for your shares - just sell them in the open market right now.
The reason for the current discount is because 10%'s worth of holders (Baillie Gifford and Setanta) have said they won't subscribe to the deal.
There are 46% of shares NOT owned by ENOC. They want the majority of those (i.e. 23%) to say yes. And right now we know that 10% are saying NO. Hence we need 23% from that 36% remaining.
BG and Setanta are paying a slightly dangerous game whereby they believe fair value is well above 750p so either they want a higher offer or they are happy to wait for the share price to rise on its own up to their version of fair value.
Note that in my experience if ENOC didn't get enough agreement and noped the hell out of there, the share price would drop considerably, probably to around the 675p level it was at before this latest offer - but very possibly far below that.
IANAL and this isn't FCA regulated advice.
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