Hedge Funds Dana Petroleum
Hedge Funds to Profit from Korea's Acquisition of Dana
Hedge funds will score big profits if an expected deal involving South Korea's oil firm goes through. The state-owned oil firm,
Korea National Oil Corp (KNOC), is looking to buy a British competitor, Dana Petroleum (DNX.L). Several hedge funds, including Eton Park and Jabre Capital, are building up shares in Dana in anticipation of the acquisition although Dana's CEO seems opposed to the deal. If the deal does go through hedge funds will profit immensely from the takeover.
More than a dozen hedge funds are set to book big profits supporting South Korea's state oil firm in its pursuit of British peer Dana Petroleum (DNX.L).
The funds, including Eric Mindich's Eton Park and Philippe Jabre's Jabre Capital, have built up stakes totalling more than a third of Aberdeen-based Dana's shares, wagering the Koreans' $6.5 billion warchest and thirst for resources will prevail despite rebuffs from Dana chief executive Tom Cross.
Aside from Kraft Foods Inc's (KFT.N) pursuit of Cadbury, few European takeovers since the credit crisis have attracted as much attention -- and money -- from merger arbitrageurs, or arbs.
And they appear to have been proved right, partly thanks to their own efforts. On Friday, Korea National Oil Corp (KNOC) unveiled a hostile 1.7 billion pound ($2.6 billion) bid for Dana worth 1,800 pence per share.
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Korea National Oil Corp
