Faroe instructs shareholders on next steps for DNO’s final offer

1/9/2019

OSLO -- The Board of Faroe has made the following statement further to the announcement by DNO ASA on Jan. 8, 2019 that it has increased its unsolicited offer to 160p per share and made its offer final, and the announcement by DNO that following further purchases of Faroe shares, DNO owns or has received acceptances for a total of 195,526,068 Faroe shares, representing approximately 52.44% of the ordinary issued share capital of Faroe.

The Board notes that upon settlement of the further share purchases the Final Offer will become unconditional in all respects.

While the Board does not believe the Final Offer represents fair value, the Board recognizes that, as set out above, the Offer will be declared wholly unconditional upon settlement of the further share purchases made by DNO and DNO will therefore acquire statutory control of Faroe.

The Board considers that, following its initial investment in Faroe and in the conduct of its subsequent Offer, DNO has created considerable uncertainty for minority shareholders. In particular, DNO has stated that, should it acquire statutory control of Faroe, it may be required to combine DNO’s interest in its Norwegian operating subsidiary with Faroe’s Norwegian operating subsidiary. DNO has also stated that, if the level of acceptances of its Offer reaches 75%, it intends to take steps to delist the Company which would significantly reduce the liquidity and marketability of Faroe’s shares. The Board also notes that DNO has indicated that it expects to make changes to the Faroe Board and the Board therefore considers there to be no assurance that Faroe would continue to maintain its current corporate governance culture in line with UK corporate governance best practice.

Accordingly, the Board now recommends that, given the Final Offer will become wholly unconditional, shareholders should accept the Final Offer, as Faroe directors intend to do in respect of their own beneficial holdings.

The Board intends to work with DNO in the interim period to ensure an orderly transition of control of the Company in the interests of all our stakeholders, including our shareholders and employees.

Upon the Final Offer becoming unconditional in all respects, it will in accordance with the UK Takeover Code, remain open for acceptance for at least 14 days from the date the Final Offer would otherwise have closed. Accordingly, we would expect DNO to announce that upon the Final Offer becoming unconditional in all respects, the Final Offer will remain open until at least 14 days from Jan. 23, 2019 being Feb. 6, 2019.

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