NORTH Sea-focused Faroe Petroleum’s board hammered home its view that DNO was trying to buy the firm on the cheap as the Norwegian company stepped up its attempt to acquire the business though a £608m hostile takeover.

DNO published the terms of its 152p per share cash offer for Aberdeen-based Faroe in a document sent to shareholders in its target.

Oslo-listed DNO said the offer was full and fair and provided Faroe shareholders with a rare opportunity to exit their positions at an attractive price in a volatile and uncertain market for oil and equities.

Led by executive chairman Bijan Mossavar-Rahmani, DNO said Faroe had failed to deliver consistent shareholder returns over the 15 years since the company listed on the Aim market. Faroe had raised £362m since listing but had had a market capitalisation of just £385m before DNO started buying shares in the company in April.

“Since listing, no dividends have been paid and no capital otherwise returned to shareholders,” said DNO.

“Meanwhile, back at the ranch, the Faroe directors have been awarded a high number of share options at nil cost.”

In response Faroe’s board said DNO’s opportunistic offer sought to exploit the recent oil price fall to acquire the company on the cheap.

It said Faroe’s remuneration policy was in line UK peers. The company’s remuneration report was approved by 99.9% of shareholders who voted at this year’s general meeting, with the exception of DNO.

The company’s chairman John Bentley said: “Faroe is widely regarded as one of the pre-eminent North Sea E&P companies with a high quality, full cycle and diversified asset base and a management team that, time and again, has demonstrated its ability to create value through exploration and active portfolio management.”

He added: “As such, Faroe would solve DNO’s strategic challenges and Faroe shareholders should receive an appropriate premium which is not currently reflected in DNO’s Offer.”

DNO has set an initial deadline of 1pm on January 2 for acceptances of its offer, which is conditional on the firm achieving a holding of one share more than 57.5% of Faroe’s issued share capital.

Faroe shares closed up 0.4p at 153.4p.

DNO had wanted two of its directors voted on to the Faroe board but shelved the proposal in August after facing fierce opposition from the company.