26 February 2024
Diversified Energy Company PLC
("Diversified" or the
"Company")
Return of Capital to
Shareholders by way of Dividend Payment or Acquisition of Shares
via Tender Offer
Publication of Circular and
Tender Offer Open
Diversified Energy Company PLC (LSE:
DEC; NYSE: DEC) announces that further to the announcement of 15
February 2024, the Company has today published a circular (the
"Circular") in connection
with the Return of Capital, details of which are set out
below.
The Circular will today be posted to
the shareholders and is also available on the Company
website, ir.div.energy.
A copy of the Circular will also be filed and available for
inspection at the National Storage
Mechanism https://data.fca.org.uk/#/nsm/nationalstoragemechanism
shortly.
Following the announcement on 15
November 2023 of the interim dividend for the three-month period
ended 30 September 2023 (the "Third Quarter Dividend"), the Company
is offering shareholders with an opportunity to elect how they will
receive the return of capital of approximately US$42 million, in
aggregate (the "Return of
Capital"). The Company will return the same amount of the
previously declared Third Quarter Dividend, but shareholders will
be offered the optionality as to how they receive that
payment.
The Directors believe that the
current trading price of the shares does not reflect the quality of
the Company's assets nor the significant opportunities for the
Company's long-term strategy. The Directors therefore consider that
the repurchase of shares is a prudent use
of capital for the Company and is in the best interests of the
shareholders.
Following consultation with
shareholders and after careful consideration of the feedback
received, the Company is offering shareholders optionality as to
the Return of Capital. Specifically, Qualifying Shareholders (as
defined below) can elect to either:
· Do
nothing, in which case they will remain unimpacted and will be paid
their Third Quarter Dividend on 28 March 2024; or
· Elect
to waive some or all of their Entitlement (as defined below) in
order to have their Shares (as defined below) purchased in a tender
offer for cash (the "Tender
Offer") at the Tender Price (which will include a
premium).
The Company will fund the Tender
Offer using funds available from the Company's cash and cash
equivalents.
This Return of Capital allows
shareholders to be paid the same total amount of the previously
declared Third Quarter Dividend while providing optionality for
shareholders to receive that payment in the form of a cash dividend
payment or a cash payment as consideration for the sale of their
Shares in the Tender Offer. The aggregate amount of funds the
Company will utilise in relation to the Return of Capital will be
approximately US$42 million, which is the approximate amount of the
Third Quarter Dividend announced on 15 November 2023.
Details of the Return of Capital
On 15 November 2023, Diversified
declared an interim dividend of US$0.04375 per ordinary share of
£0.01 each in respect of the three-month period ended 30 September
2023, which was adjusted to US $0.875 per ordinary share of £0.20
each (the "Shares")
following the Company's share consolidation as announced on 7
December 2023 (the "Entitlement"). The total amount of the
Third Quarter Dividend is approximately US$42 million.
Qualifying Shareholders are not
obliged to waive their Entitlement to the Third Quarter Dividend
and tender any of their Shares if they do not wish to do so.
Qualifying Shareholders who do not submit any instructions to waive
some or all of their Entitlement amount in order to tender their
Shares, and all non-Qualifying Shareholders, will remain unimpacted
and will be paid their Entitlement to the Third Quarter Dividend on
28 March 2024; they do not need to take any action.
The purchase price to be paid by the
Company in the Tender Offer will be 105% of the average market
value per Share for the five business days immediately preceding
27 March 2024, being the expected date on which the Shares are
to be purchased (the "Tender
Price") and will be announced by the Company via a
Regulatory Information Service on the date preceding the closing
date, expected to be 26 March 2024 (the "Closing Date"). The Company also
expects to announce the GBP:USD exchange rate for the Third Quarter
Dividend on or around 20 March 2024. As the
Third Quarter Dividend has been declared in US dollars, such
exchange rate will also determine the amount of the Third Quarter
Dividend in pound sterling (GBP) for shareholders who wish to waive
some or all of their Entitlement in order to participate in the
Tender Offer. The Tender Offer is subject to certain customary
conditions (including regulatory approvals, as applicable) and
subject to the Tender Price being not less than £9.35. If any of
the conditions to the Tender Offer are not satisfied by 10.00 a.m.
(London time) on 27 March 2024, the Company reserves the right to
withdraw the Tender Offer. If the Tender Offer is withdrawn, the
Company shall not be obliged to effect the purchase of any tendered
Shares under the Tender Offer. If the Tender Offer is withdrawn,
all shareholders will be paid the same total amount of the
previously declared Third Quarter Dividend in cash in full on 28
March 2024.
The Tender Offer is being made by
the Company's broker, Stifel, as principal, on the basis that all
Shares that it buys under the Tender Offer will be purchased from
it by the Company under its existing buy-back authority granted at
the annual general meeting of the Company held on 2 May 2023. All
Share purchase transactions by Stifel will be carried out through
an on-market trade placed on the London Stock Exchange only. No
Share repurchase transactions will be undertaken pursuant to this
Tender Offer on the New York Stock Exchange. Shares purchased under
the Tender Offer will be cancelled by the Company.
The Tender Offer will be subject to
certain terms and conditions. Specific instructions and an
explanation of the terms and the conditions of the Tender Offer are
contained in the Circular and an offer to purchase in the United
States filed as an exhibit to a Schedule TO the Company has filed
with the U.S. Securities and Exchange Commission (the "Offer to Purchase") and related
materials that are made available to shareholders
on the Company
website, ir.div.energy.
The Tender Offer is only available
to shareholders who are on the depositary interest register at 6.00
p.m. (London time) on 1 March 2024 (the "Qualifying Shareholders"). Further,
shareholders with registered addresses in certain jurisdictions are
not eligible for the Tender Offer. Therefore, all Qualifying
Shareholders who wish to participate in the Tender Offer should
ensure that their interest in the Shares is capable of being
settled in CREST at 6.00 p.m. (London time) on 1 March
2024.
Only Qualifying Shareholders will be
entitled to waive some or all of their Entitlement in order to
validly submit tenders for the purchase of Shares at the Tender
Price up to the amount of their waived Entitlement. A Qualifying
Shareholder will not be entitled to tender Shares in excess of
their respective Entitlement. Applications made by Qualifying
Shareholders in excess of their respective Entitlement will be
scaled back to their Entitlement. A Qualifying Shareholder who
elects to waive only some of their Entitlement in order to validly
submit tenders for purchase of Shares at the Tender Price will be
paid the remainder of the Entitlement to the Q323 Dividend that
they have elected to not waive pursuant to their TTE instructions
in CREST on 28 March 2024.
Qualifying Shareholders who have
sold, or otherwise transferred, Shares that they held as at the
Record Date prior to the Closing Date will only be entitled to
validly tender such Shares that they still hold as at the Closing
Date. Any such Qualifying Shareholder's waived Entitlement will be
calculated as the total number of Shares validly tendered by them
multiplied by the Tender Price, and they will be paid the remainder
of the Entitlement on 28 March 2024.
If the amount of Entitlement that
has been waived does not result in an exact number of Shares at the
Tender Price, such Entitlement amount will be correspondingly
reduced to purchase the nearest whole number of Shares in the
Tender Offer at the Tender Price and the remaining portion of such
Entitlement shall be deemed to have been waived by the Qualifying
Shareholder and will be retained by the Company. In all
circumstances, any such amount retained by the Company shall not
exceed the Tender Price per Share.
None of the Company, the Directors,
Stifel, or any of their respective affiliates makes any
recommendation as to whether any Shareholder should elect to waive
their Entitlement to the Third Quarter Dividend in order to tender
their Shares pursuant to the Tender Offer, and no one has been
authorized by any of them to make such recommendation. Each
Shareholder must make their own decisions as to whether to elect to
waive their Entitlement in order to participate in the Tender Offer
or do nothing and receive their Entitlement to the Third Quarter
Dividend.
Certain Information Regarding the Tender
The Tender Offer qualifies as a
"Tier II" offer in accordance with Rule 14d-1(d) under the Exchange
Act and, as a result, is exempt from certain provisions of
otherwise applicable U.S. statutes and rules relating to tender
offers. U.S. and English law and practice relating to tender
offers are different in certain material respects. The
Company intends to rely on the Tier II exemption from Rule 14e-1(c)
on prompt payment where we will follow English law and
practice.
The information in this press
release describing the Tender Offer is for informational purposes
only and does not constitute an offer to buy or the solicitation of
an offer to sell shares of the Company in the Tender Offer. The
Tender Offer will only be made pursuant to the Circular, the Offer
to Purchase and other related materials filed as part of the Tender
Offer Statement on Schedule TO, in each case as may be amended or
supplemented from time to time. Shareholders should read such
Circular and Offer to Purchase and related materials carefully and
in their entirety because they contain important information,
including the various terms and conditions of the Tender
Offer.
The Circular and the Offer to
Purchase in each case containing the full terms and conditions of
the Tender Offer and instructions to shareholders on how to tender
their Shares should they wish to do so and is available to
shareholders on the Company's website at ir.div.energy.
A copy of the Circular has been submitted to the National Storage
Mechanism and will be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
shortly.
To the extent permitted by
applicable law and in accordance with normal UK practice, the
Company, Stifel or any of their respective affiliates may make
certain purchases of, or arrangements to purchase, Shares outside
the United States before and during the period in which the Tender
Offer remains open for participation, including sales and purchases
of Shares effected by Stifel or its affiliates acting as market
maker in the Shares on the London Stock Exchange. These purchases,
or other arrangements, may occur either in the open market at
prevailing prices or in private transactions at negotiated prices.
In order to be excepted from the requirements of Rule 14e-5 under
the Exchange Act by virtue of Rule 14e-5(b)(12) thereunder, such
purchases, or arrangements to purchase, must comply with applicable
English law and regulation, including the Listing Rules, and the
relevant provisions of the Exchange Act. Any information about such
purchases will be disclosed as required in the UK and the US and,
if required, will be reported via a Regulatory Information Service
and will be available on the London Stock Exchange website
at www.londonstockexchange.com.
Shareholders may obtain a free copy
of the Tender Offer Statement on Schedule TO, the Offer to Purchase
and other documents that the Company will file with the Securities
and Exchange Commission from the Securities and Exchange
Commission's website at www.sec.gov once available. Shareholders
are urged to carefully read all of these materials prior to making
any decision with respect to the Tender Offer, and this
announcement should be read in conjunction with the full text of
the Circular and the Offer to Purchase once available. Following
the commencement of the Tender Offer, if you have any queries
relating to the waiver of your Entitlement to the Third Quarter
Dividend and participation in the Tender Offer, please contact
Computershare Investor Services PLC on 0370 702 0151 (or +44 (0)
370 702 0151) if calling from outside the United Kingdom). Calls
are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the
applicable international rate. The helpline is open between 8.30
a.m. - 5.30 p.m., Monday to Friday excluding public holidays in
England and Wales. Please note that Computershare Investor Services
PLC cannot provide any financial, legal or tax advice and calls may
be recorded and monitored for security and training
purposes.
Expected Timetable of Events
Tender Offer Circular
published
|
26
February 2024
|
|
|
Tender Offer opens
|
26
February 2024
|
|
|
Third Quarter Dividend ex-dividend
date
|
29
February 2024
|
|
|
Latest time for shareholders who
wish to participate in the Tender Offer to become a Qualifying
Shareholder
|
6.00 p.m.
on 1 March 2024
|
|
|
Record Date for Tender Offer and the
Third Quarter Dividend
|
6.00 p.m.
on 1 March 2024
|
|
|
Publication of 2023 year-end
results
|
19 March
2024
|
|
|
Announcement of the GBP:USD exchange
rate for the Third Quarter Dividend
|
20 March
2024
|
|
|
Announcement of the Tender
Price
|
on or
around 4.35 p.m. on 26 March
2024
|
|
|
Tender Offer Closing Date and latest
time for receipt of TTE Instructions in CREST
|
10.00 a.m.
on 27 March 2024
|
|
|
Announcement of results of the
Tender Offer
|
27 March
2024
|
|
|
Trade Date for the Tender
Offer
|
27 March
2024
|
|
|
Third Quarter Dividend payment date
for those shareholders who have not elected to participate in the
Tender Offer
|
28 March
2024
|
|
|
Settlement of the Tender Offer
consideration in CREST for those shareholders who have elected to
participate in the Tender Offer
|
28 March
2024
|
The dates given in this announcement
are London time and are based on the Company's current expectations
and may be subject to change. Any changes to the expected timetable
will be announced via a regulatory information service.
Terms used and not defined in this
announcement shall have the meanings given to them in the
Circular.
For further information please
contact:
About Diversified Energy Company PLC
Diversified is a leading publicly
traded energy company focused on natural gas and liquids
production, transport, marketing, and well retirement. Through our
differentiated strategy, we acquire existing, long-life assets and
invest in them to improve environmental and operational
performance until retiring those assets in a safe and
environmentally secure manner. Recognized by ratings agencies and
organizations for our sustainability leadership, this
solutions-oriented, stewardship approach makes Diversified the
Right Company at the
Right Time to responsibly produce energy, deliver reliable
free cash flow, and generate shareholder value.
Cautionary Statement
This announcement may contain
certain forward-looking statements, including with respect to the
Company's current targets, expectations and projections about
future performance, anticipated events or trends and other matters
that are not historical facts. These forward‐looking statements, which sometimes
use words such as "aim", "anticipate", "believe", "intend", "plan",
"estimate", "expect" and words of similar meaning, include all
matters that are not historical facts and reflect the directors'
beliefs and expectations, made in good faith and based on the
information available to them at the time of the announcement. Such
statements involve a number of risks, uncertainties and assumptions
that could cause actual results and performance to differ
materially from any expected future results or performance
expressed or implied by the forward‐looking statement and should be
treated with caution. Any forward-looking statements made in this
announcement by or on behalf of the Company speak only as of the
date they are made. Except as required by applicable law or
regulation, the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in its expectations with regard thereto or any
changes in events, conditions or circumstances on which any such
statement is based.