KNOC said it has reviewed Dana's defense document, but concluded it did not contain any information that "alters KNOC's view on value."
KNOC's offer, which turned hostile in late August after it failed to win Dana's approval, valued Dana at some $2.9 billion, but the UK company believes it is worth closer to $3.9 billion.
Based on an independent expert report, Dana said it is worth in a range of GBP22.70-24.65/share, especially given the purchase of certain UK offshore assets from Petro-Canada UK, a subsidiary of Canada's Suncor, for $372 million, announced Wednesday.
KNOC rejected that the new acquisition was value-adding.
"In respect of the assets Dana has recently agreed to acquire from Petro-Canada UK, KNOC notes that these assets have been acquired pursuant to a long-running and widely marketed auction process," it said.
"KNOC does not understand Dana's assertion that immediate value uplift can be created," it said, adding that it was "concerned" about the abandonment liabilities associated with the assets, "which could be very significant."
KNOC said it was sticking with its GBP18/share offer and urged Dana's shareholders to "accept the share offer immediately and, in any event, by no later than September 23."
The company said it would only increase the offer if a competitive situation arose, such as another bidder emerging. KNOC reserved its right to increase the share offer if a competitive situation were to arise, it said.
Dana issued its own statement later Thursday in response to KNOC's, urging shareholders not to sell to the Korean company.
"The [Dana] board believes that the KNOC offer substantially undervalues Dana," it said.
"The board, which has been so advised by RBS Hoare Govett, RBC Capital Markets and Morgan Stanley, unanimously recommends that you should reject the offer."
KNOC said it had already received "letters of intent in support" from 49% of Dana's stock accepting its GBP18/share offer and analysts believe Dana will ultimately succumb to the hostile takeover.
"KNOC is now able to begin acquiring Dana stock in the open market and we continue to believe the GBP18/share offer represents a good price for the Dana assets," analysts at London-based Citi said in a note. "It now appears Dana has few options left to fend off its Korean suitors."
Dana's shares dropped after the KNOC announcement, falling below the GBP18/share level for the first time since August 24.
At 1110 GMT, shares were down 1.1% at GBP17.88.
'TRANSFORMATIONAL GROWTH'
KNOC also dismissed Dana's claim it was entering a "transformational growth" period given its upcoming exploration program and expected production growth.
"During 2010, Dana is on course to nearly double production to 70,000 boe/d and grow its reserve base significantly," CEO Tom Cross said Wednesday.
In response, KNOC said: "Organic production growth in the existing asset base has fallen by 4.6% during H1 2010 and reserves within Dana's core portfolio have been subject to a negative revision of approximately 24 million barrels during the first half."
"In this context, Dana has recently turned to acquisitions in competitive auctions in an effort to grow production and reserves," it said.
A senior KNOC official involved in the deal said the statement represented the company's final offer.
"We issued today's statement to announce to the market that our offer is final," he told Platts.
"If we successfully take over Dana, South Korea's independent oil production will greatly improve while we can also expand our areas of exploration activities from the American and former Soviet regions to the North Sea and Africa," the KNOC official said.
KNOC is spearheading upstream oil projects abroad for South Korea, the world's fifth-largest crude buyer that imports almost all of its requirements.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
