Dragon Oil investor rejects ENOC bid

Oil producer Dragon Oil’s largest independent investor the asset management firm Baillie Gifford, has said an increased takeover offer from majority owner Emirates National Oil Company (ENOC) “materially undervalued” the company.

ENOC, which owns 54% of Dragon Oil, raised its bid to buy out minority shareholders to 750p (1,045c) per share on Tuesday, valuing the stock it does not already own at about £1.7bn and an overall takeover at £3.7bn; up from a previous proposal of £3.6bn.

Baillie Gifford, Dragon’s second-biggest investor after ENOC, with a 7.2% stake, said the improved offer does not fully value the firm’s growth potential. The move sets the stage for other significant minorities to hold out for an improved bid, said Alex Olvera, event driven analyst at Makor Securities.