NORWEGIAN oil firm DNO has shelved its bid to get two directors elected to the board of North Sea-focused Faroe Petroleum as the standoff between the firms became increasingly bitter.
DNO has withdrawn its request for an extraordinary general meeting (EGM) of shareholders to consider the planned boardroom change after its proposal drew an angry response from Aberdeen-based Faroe Petroleum earlier this month.
Directors of Faroe said DNO’s move was wholly self-serving and part of an undisclosed strategy on its part to try and gain control of the company on the cheap.
Yesterday DNO said it noted “with deep disappointment Faroe Petroleum’s repeated peremptory and disdainful attitude" to its proposal.
The company added: “Given Faroe Petroleum’s increasingly hostile public response … DNO will not pursue a meeting of shareholders at this time while it considers its position.”
DNO has become the biggest shareholder in Faroe, after building a 28.23 per cent stake since the start of April. It focused on the Middle East previously.
DNO said in April it had decided to build a long-term strategic shareholding in Faroe and to support its management’s growth-focused North Sea strategy. On April 4, DNO said it did not intend to make an offer for Faroe.
Led by chief executive Graham Stewart, Faroe has developed an extensive portfolio of Norwegian and UK assets.
Yesterday, DNO said it had requested a shareholder meeting to seek suitable representation on the Faroe board and to raise concerns about the firm’s wider governance culture and shareholder value strategies.
A spokesperson for Faroe said:“We welcome the withdrawal of the resolutions which we believe would ultimately have been soundly defeated based on our discussions with major institutional shareholders."
The spokesperson added: “Faroe welcomes constructive dialogue with all shareholders and shall continue to seek an active engagement with DNO."
In the requisition submitted earlier this month DNO proposed that its executive chairman Bijan Mossavar-Rahmani and managing director Bjørn Dale should be elected to the board of Faroe, which is listed on the Alternative Investment Market.
The market was closed for the August bank holiday yesterday.
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