LEI: 213800HAZOW1AWRSZR47
23 February 2024
Riverstone Energy Limited
NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO CANADA, AUSTRALIA,
NEW ZEALAND OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION.
Tender Offer and Notice of Extraordinary General
Meeting
Further to its announcement on 8
February 2024, Riverstone Energy Limited (the "Company")
announces a Tender Offer for up to 15,047,619 of the Company's
ordinary shares (the "Shares"), representing 35.66 per cent. of the
existing Shares in issue (excluding any Shares held in treasury),
to be acquired at a single price equal to £10.50 (the "Tender
Price"). Capitalised terms used but not
otherwise defined in this announcement shall have the same meaning
as set out in the circular in respect of the Tender Offer (the
"Circular") being published later today.
The Tender Price represents a
premium of approximately 14 per cent. to the closing market price
per Share of £9.20 on 21 February 2024 (being the latest
practicable date prior to publication of this document) and
represents a discount of approximately 16 per cent. to the
unaudited Net Asset Value per Share of £12.53 as at 31 December
2023 (on the basis of the then prevailing USD: GBP exchange rate of
1.2736:1).
The Board has arranged for the Tender
Offer to return $200 million, equivalent to £158
million[1]
in Sterling of excess capital to
Eligible Shareholders by providing the opportunity for all such
Eligible Shareholders on the Record Date to exit part of their
Shareholding in the Company by participating in the Tender Offer,
whilst ensuring that continuing Shareholders who do not wish to
tender their Shares are not disadvantaged, as the Tender Offer is
expected to be accretive to the Company's prevailing published NAV
at the point of completion of the Tender Offer.
The Tender Offer will be available
to Eligible Shareholders on the Register as at the Record Date,
which is 6.00 p.m. (London time) on 25 March 2024.
Reasons for the tender offer and outlook for the
Company
As at 21 February 2024 (being the
latest practicable date prior to publication of this document, the
Company held aggregate cash balances of approximately $291 million.
A significant portion of these cash balances are attributable to
the disposal of the Company's investment in Hammerhead Energy Inc.
to Crescent Point Energy Corp.
These cash balances exceed the
amount that the Company currently requires for its investment
purposes. Accordingly, the Company has determined to use $200
million, equivalent to £158 million in Sterling, of its cash to
provide the opportunity for all Eligible Shareholders on the Record
Date to exit part of their Shareholding in the Company by
participating in the Tender Offer.
Following completion of the Tender
Offer, and assuming it is accepted in full, the Company's remaining
cash balances are expected to total approximately $91
million. These remaining cash balances will be applied to the
Company's on-going investment activities, expenses and, as
described below, potentially to further market repurchases of
Shares.
The Company intends that, through
the Investment Manager, it will continue to work as an active
investor with the aim of enhancing the value of both its
conventional and decarbonisation investment portfolios, as
demonstrated by the Investment Manager's recent work in relation to
the Company's investments in each of Hammerhead, Onyx and Permian
Resources. The Company is committed to managing its existing
decarbonisation investment portfolio to maturity, which may
include, where appropriate, making follow-on investments and in
other cases disposing of, or agreeing to the dilution of existing
investments by not participating in future funding rounds.
The Company's investment management agreement requires that the
Board must consent in advance to any further investments that are
made by the Company.
The
Tender Offer
The maximum number of Shares to be
acquired under the Tender Offer is 15,047,619 Shares, representing
approximately 35.66 per cent. of the Shares in issue (excluding any
Shares held in treasury) as at 21 February 2024 and equal in value
to £158 million at the Tender Price (the "Available
Shares").
The purchase of Shares under the
Tender Offer will cause an uplift in Net Asset Value in the Shares
for Shareholders who continue with their investment in the Company
with the precise amount of the uplift depending on the number of
Shares acquired in the Tender Offer.
The Record Date for participation in
the Tender Offer is 6.00 p.m. on 25 March 2024. The Tender Offer is
subject to certain conditions set out in the Circular and may be
suspended or terminated in certain circumstances, as set out in the
Circular.
The Company will repurchase from
successfully tendering Shareholders (other than certain Overseas
Shareholders) up to 35.66 per cent. of the Shares registered in
their name (the "Basic Entitlement"), rounded down to the nearest
whole number of Shares. Shareholders will also have the option to
tender additional Shares to the extent that other Shareholders
tender less than their Basic Entitlement. Any such excess tenders
will be satisfied pro rata
in proportion to the amount tendered in excess of the Basic
Entitlement (rounded down to the nearest whole number of
Shares).
An Eligible Shareholder tendering up
to its Basic Entitlement will have such tender satisfied in full.
Any Eligible Shareholder tendering more than its Basic Entitlement
("Excess Applications") will have its Excess Application satisfied
if there are sufficient remaining Available Shares. Such Available
Shares shall be apportioned to Eligible Shareholders pro rata to
their Excess Applications should other Eligible Shareholders not
tender the full amount of their Basic Entitlement, and as a result
of certain Overseas Shareholders not being permitted to participate
in the Tender Offer.
Unless withdrawn in accordance with
the instructions set out in the Circular, once tendered, Shares may
not be sold, transferred, charged or otherwise disposed of other
than in accordance with the Tender Offer.
Further
information on how to participate in the Tender Offer and how to
tender Shares are set out in the Circular.
Taxation
Shareholders who sell Shares in the
Tender Offer may, depending on their individual circumstances,
incur a liability to taxation. The attention of Shareholders is
drawn to the Circular which sets out a general guide to certain
aspects of current law and tax authority practice in respect
of UK and US taxation. Shareholders who are in any
doubt as to their tax position or who are subject to tax in a
jurisdiction other than the United Kingdom or the
United States should consult an appropriate professional
adviser.
Takeover Code
Shareholders should note the
following important information relating to certain provisions of
the City Code, which will be relevant to purchases of Shares after
the date of the Circular.
Under Rule 9 of the City Code, any
person or group of persons deemed to be acting in concert who
acquires an interest in shares which carry 30 per cent. or more of
the voting rights of a company to which the City Code applies is
normally required by the Takeover Panel to make a general offer to
shareholders of that company to acquire their shares. Rule 9 of the
Takeover Code also provides that any person or group of persons
deemed to be acting in concert who is interested in shares which in
the aggregate carry between 30 per cent. and 50 per cent. of the
voting rights of a company to which the City Code applies will be
unable, without the Takeover Panel's consent, to acquire, either
individually or together, any further voting rights in the company
without being required to make a general offer to shareholders of
that company to acquire their shares. An offer under Rule 9 must be
in cash and at the highest price paid by the person required to
make the offer or any person acting in concert with him for any
interest in shares in the company during the 12 months prior to the
announcement of the offer.
It is possible that, on completion
of the Tender Offer, the proportionate size of the shareholding of
one or more Shareholders could increase so that they hold 30 per
cent. or more of the voting rights of the Company following
implementation of the Tender Offer. In particular, as at 21
February 2024 (being the last practicable date prior to publication
of this announcement) Moore Capital Management held Shares carrying
approximately 19.98 per cent. of the voting rights attaching to the
Company's issued Shares (excluding shares held in treasury).
Therefore, if Moore Capital Management were to choose not to tender
into the Tender Offer (whether in respect of their respective Basic
Entitlement or a lower amount) and the Tender Offer completes, the
voting rights of the Shares held by Moore Capital Management Group
could exceed 30 per cent. of the Company's total voting rights
following the Tender Offer.
Under Rule 37.1 of the City Code,
when a company purchases its own voting shares, a resulting
increase in the percentage of shares carrying voting rights in
which a person or group of persons acting in concert is interested
will be treated as an acquisition for the purpose of Rule
9.
A shareholder not acting in concert
with the directors will not incur an obligation to make a general
offer under Rule 9 if, as a result of the purchase of its own
shares by a company, he comes to exceed the percentage limits set
out in Rule 9. However, this exception will not normally apply when
a shareholder not acting in concert with the directors (as such
term is understood for the purposes of the City Code) has acquired
an interest in shares at a time when he had reason to believe that
such a purchase of its own shares by the company would take place.
For the avoidance of doubt, RIGL Holdings, LP, as the investment
manager of the Company, is considered to be a Director for the
purposes of the City Code.
A Shareholder not acting in concert
with the Directors may, therefore, incur an obligation under Rule 9
to make a general offer to Shareholders to acquire their Shares if,
as a result of the purchase by the Company of its own Shares from
other Shareholders, he, she or it comes to hold or acquires an
interest in 30 per cent. or more of the Shares following the Tender
Offer or otherwise and he, she or it has purchased Shares or an
interest in Shares when he, she or it had reason to believe that
the Company would purchase its own Shares (under the Tender Offer
or otherwise).
Extraordinary General Meeting
The implementation of the Tender
Offer requires the approval of Shareholders. A notice convening an
Extraordinary General Meeting of the Company, which is to be held
at 11.00 a.m. (London time) on 26 March 2024 at Trafalgar Court,
Les Banques St Peter Port Guernsey GY1 4LY, Channel Islands, is set
out at the end of the Circular. The quorum requirement for the
Extraordinary General Meeting is not less than two Shareholders
present in person or by proxy (or, in the case of a corporation, by
a duly appointed representative).
The Resolution is to be proposed as
a special resolution under Guernsey law and must be passed in order
to enable the implementation of the Tender Offer. As a special
resolution, the Resolution requires not less than 75 per cent. of
the Shareholders and duly appointed proxies attending the meeting
and voting on a show of hands to vote in favour (excluding any
votes that are withheld) or, if a poll is demanded, not less than
75 per cent. of the total voting rights cast on the relevant
resolution (excluding any votes that are withheld) to be in
favour.
The Resolution permits the Company
to effect the Tender Offer so as to permit those Eligible
Shareholders who wish to realise their investment (whether in whole
or in part) to do so, subject to the terms and conditions of the
Tender Offer and the extent to which Eligible Shareholders tender
their Shares.
Board intentions in relation to the Tender
Offer
The Board considers that the Tender
Offer is in the best interests of Shareholders as a
whole.
No Director will tender Shares owned
or controlled by that Director in the Tender Offer.
Expected Timetable
|
Latest time and date for receipt of
Forms of Proxy for the Extraordinary General Meeting
|
11.00 a.m.
on 22 March 2024
|
|
|
Latest time and date for receipt of
Tender Forms and TTE Instructions
|
1.00 p.m.
on 25 March 2024
|
|
|
Record Date for Tender
Offer
|
6.00 p.m.
on 25 March 2024
|
|
|
Extraordinary General
Meeting
|
11.00 a.m.
on 26 March 2024
|
|
|
Results of Extraordinary General
Meeting and results of Tender Offer announced
|
26 March
2024
|
|
|
Repurchase date for successfully
tendered Shares
|
28 March
2024
|
|
|
Settlement through CREST of, and
despatch of cheques for, the Tender Offer consideration, as
appropriate
|
by 5 April
2024
|
|
|
Despatch of balance share
certificates and crediting of CREST accounts with Shares not
purchased
|
by 5 April
2024
|
|
All references are to local time in
London on the day in question.
The dates set out in the expected
timetable may be adjusted by the Company in which event details of
the new dates will be notified to Shareholders via an announcement
made by the Company through a Regulatory Information
Service.
Share Buyback Programme
The authority to repurchase Shares
in the Tender Offer pursuant to the Resolution to be proposed at
the EGM is in addition to the authority for the Company to make
market purchases of Shares granted at the Company's annual general
meeting on 23 May 2023. The Company will not make market purchases
of Shares while the Tender Offer is continuing. The Company may
resume its market purchase share buyback programme following the
completion of the Tender Offer, although any decision to resume the
buyback programme, the amount of any buyback programme and the
timing of any such purchases, will be entirely at the Board's
discretion and subject to, amongst other things, applicable law,
the Company's performance, market conditions and the cash reserves
available to the Company, in each case as determined by the Board
with the consent of the Investment Manager at the relevant
time.
Publication of Circular
The Circular, which contains the
full terms and conditions of the Tender Offer, instructions to
Eligible Shareholders on how to tender their Shares should they
choose to do so, is being posted to Eligible
Shareholders.
A copy of the Circular will shortly
be available to view on the Company's website at
https://www.riverstonerel.com/
A copy of the Tender Offer circular
has been submitted to the National Storage Mechanism and will
shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
For further information
For Riverstone Energy Limited:
Josh
Prentice
+44 (0) 20
3206 6300
J.P. Morgan Cazenove - Joint
Corporate Broker
William Simmonds
Jeremie Birnbaum
+44 (0) 203 493 8000
Deutsche Numis - Joint Corporate
Broker
Hugh Jonathan
Matt Goss
+44 (0) 207 260 1000
About Riverstone Energy Limited:
REL is a closed-ended investment
company which invests in the energy industry that has since 2020
been exclusively focussed on pursuing and has committed $211
million to a global strategy across decarbonisation sectors
presented by Riverstone's investment platform. REL's ordinary
shares are listed on the London Stock Exchange, trading under the
symbol RSE. REL has 14 active investments spanning
decarbonisation, oil and gas, renewable energy and power in the
Continental U.S., Western Canada, Europe and Australia.
For further
details, see www.RiverstoneREL.com
Neither the
contents of Riverstone Energy Limited's website nor the
contents of any website accessible from hyperlinks on the websites
(or any other website) is incorporated into, or forms part of, this
announcement.