StockMarketWire.com - Faroe Petroleum has been forced to back a hostile £641.7m takeover bid by Norwegian oil and gas operator DNO after its offer gained the support of more than half its shareholders.

DNO on Wednesday increased its stake in Faroe to 52.4%, a day after it sweetened its bid for the company to 160p a share, up from an initial £1.52 tabled in November.

Faroe said that although it still did not believe the offer was high enough, it recognised that DNO's offer would now be declared wholly unconditional.

'Accordingly, the board now recommends that shareholders should accept the final offer, as Faroe directors intend to do in respect of their own beneficial holdings,' Faroe said.

'The board intends to work with DNO in the interim period to ensure an orderly transition of control of the company in the interests of all our stakeholders, including our shareholders and employees.'