ENOC remains confident of Dragon Oil deal

The Emirates National Oil Company (ENOC) believes its takeover of Irish-listed explorer Dragon Oil will succeed, despite significant minority-shareholder opposition to the current offer.

“Based on our direct ongoing engagement with Dragon Oil’s shareholders, we are confident that there is significant shareholder support for the full and fair offer, of 750p,” an ENOC spokesperson said yesterday.

Dragon is based in Dubai, operational in Turkmenistan, and listed in Dublin and London. Shares in the company hit record highs last month after majority shareholder ENOC upped its offer, for the 46% of the company it does not currently own, from €5.03bn to €5.1bn.

However, Scottish-based investment management firm Baillie Gifford, the leading minority shareholder, said the improved offer still undervalued Dragon. It has been reported that Baillie Gifford has been trying to rally other minority shareholders to hold out for even better terms from ENOC.

That said, it is understood that Dublin-based Setanta Asset Management, which also came out against the ENOC offer this week, has acted alone in labelling the offer as significantly undervaluing the company.

“Clients of Setanta have been invested in Dragon Oil since 2009. We have been pleased with the performance of the business since then and view its longer-term prospects favourably,” Setanta fund manager Richard Doyle said on Monday, adding that ENOC should increase its offer to “more reasonably reflect the long-term value of the business”.

ENOC needs 77% approval (technically 23 percentage points more than it has at present) by a deadline of July 30 to be able to delist the company.

Hedge fund manager Man GLG recently said the 750p offer represents “a compelling price for all minority shareholders”.