SOUTH KOREA’S national oil company yesterday launched a landmark £1.87 billion (€2.28 billion) hostile takeover offer for Dana Petroleum, after shareholders owning almost half of the UK oil explorer offered support.

The move is the  first time an Asian state-owned company has taken a bid directly to shareholders in the UK, signalling a shift in the battle for overseas reserves by the region’s national energy groups.

Korea National Oil Corporation (KNOC) said it had received letters of intent from shareholders owning 48.6 per cent of Dana to sell their shares at £18 each, meaning the Dana management, led by chief executive Tom Cross, face a battle to retain their grip on the company. Dana shares, which were previously listed in Dublin, rose nearly 6 per cent in trading yesterday to £17.93.

Mr Cross, who founded Dana in 1994 and developed it from a fledgling North Sea operator to a FTSE 250 company, owns about 2 per cent of the shares.

Dana rejected an £18 per share friendly approach from KNOC earlier this month, saying it undervalued the North Sea and Africa-focused explorer. Dana is expected to launch a last ditch defence when it unveils its interim earnings next Friday.

“We believe that we have no alternative other than to put our attractive proposal directly to shareholders given the inability to reach a private agreement with the board of Dana,” said Seong-Hoon Kim, senior vice-president of KNOC.

In a statement Dana urged its shareholders and convertible bond holders to take no action in response to the KNOC offer.KNOC’s desire to acquire Dana reflects the increasing political pressure on the company from a state which has made energy security a priority, to increase its daily production from 137,000 barrels per day to 300,000 b/d by 2012.

KNOC is being advised by Bank of America Merrill Lynch and Dana by Royal Bank of Canada and Royal Bank of Scotland. – (Copyright The Financial Times Limited 2010)