Elliott Advisors U.K. Ltd., an activist investor led by billionaire Paul Singer, joined with other Dragon Oil Plc minority shareholders seeking an improved takeover offer for the explorer from Emirates National Oil Co.

“Elliott believes that the offer substantially undervalues Dragon Oil and that ENOC’s proposed price fails to reflect any of the multiple sources of value,” the investor said in a statement Friday.

Elliott’s views echo those of other minority shareholders including Baillie Gifford and Setanta Asset Management. Together, they own almost 14 percent of Dragon Oil.

ENOC offered to buy the 46 percent of Dragon Oil it doesn’t already own for 1.7 billion pounds ($2.7 billion) on June 15, offering investors 750 pence a share. Shareholders have until July 30 to accept the offer. It is ENOC’s second attempt to take full control of the company in six years.

Dragon Oil can grow its production in the near term beyond the 100,000 barrels a day guidance provided by its management, Elliott said.

“The technical team of Dragon Oil have clearly stated that production will plateau for the next five years,” ENOC said in an e-mailed statement Friday. “We are surprised that a few financial investors claim to know more about the assets than the people that operate them on a daily basis.”

Singer, the founder of hedge fund Elliott Management, is a well-known activist investor. He narrowly lost a challenge to one of South Korea’s corporate dynasties Friday after Samsung C&T Corp. investors accepted an all-stock buyout offer from the group’s de facto holding company Cheil Industries Inc.

Elliott Associates LP waged a six-week public campaign opposing the Samsung deal on grounds that the offer was too low for C&T investors. Recently in Europe, Elliott succeeded in getting two new members on the board of Alliance Trust Plc, overturning the money-management firm’s initial rejection of the changes.

Shares of Dragon Oil fell 0.3 percent to 723.5 pence as of 1:16 p.m. London time. They have gained more than 42 percent since March 13, the business day before the takeover talks with ENOC were disclosed, valuing the company at 3.57 billion pounds.

“The level of dissent reflects a recognition among the minority shareholders of the potential value drivers” including upside to production and reserves, Gerry Hennigan, an analyst at Goodbody Stockbrokers in Dublin commented

Source: www.bloomberg.com

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