(RTTNews) - Dubai-based independent oil and gas company Dragon Oil Plc (DGO.L: News ) said Monday it reached an agreement with its majority shareholder Emirates National Oil Company Limited LLC, or ENOC, whereby ENOC will buy the remaining shares of Dragon Oil not owned by it for about GBP 2.357 billion. Dragon Oil shares are currently trading up more than 8% on the London Stock Exchange.

As per the agreement, Dragon Oil shareholders will get 455 pence in cash for each scheme share. The offer price represents a premium of 34.6% to the closing price of Dragon Oil Share on June 3, the last trading day prior to the announcement of ENOC's bid.

The acquisition is expected to be effected by means of a scheme of arrangement between Dragon Oil and the scheme shareholders. The scheme will involve an application by Dragon Oil to the court to sanction the scheme. Under the scheme, scheme shareholders will receive the cash consideration in return for the cancellation of their Dragon Oil shares.

Dragon Oil added that the current directors of Dragon Oil will continue to serve on the board of directors of the company after the scheme becomes effective.

The cash consideration payable by ENOC under the terms of the acquisition will be financed from the existing financial resources of the company and by debt facilities made available to it by Standard Chartered Bank and National Bank of Dubai. Full payment of the cash consideration would involve a maximum cash payment of about GBP 1.15 billion.

The independent committee of Dragon Oil, advised by Davy Corporate Finance and HSBC, unanimously recommended that Dragon Oil Shareholders vote in favour of the proposals at the meetings.
Dubai-based diversified energy group ENOC currently owns 265.26 million Dragon Oil shares, representing about 51.5% of the existing issued share capital of Dragon Oil. Upon the completion of the deal, Dragon Oil will become a wholly-owned subsidiary of ENOC.

In November 1998, ENOC acquired a 46% interest in Dragon Oil at a price of 15 pence per share. In June 2009, ENOC said it was considering an offer to acquire all of the outstanding Dragon Oil shares it does not own at a modest premium to Dragon Oil's closing price on June 3.

Further, Dragon Oil said today it has also entered into an expenses reimbursement and non-solicitation agreement, dated November 1, with ENOC. Pursuant to this, Dragon Oil has agreed to pay specific quantifiable third party costs and expenses incurred by the acquiring company in connection with the acquisition.

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