REG - Diversified Energy - Return of Capital Option for 3Q2023 Dividend

Diversified EnergyAnnouncement

15/02/2024 07:15

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RNS Number : 2185D  Diversified Energy Company PLC  15 February 2024

15 February 2024

Diversified Energy Company PLC

("Diversified" or the "Company")

Diversified Announces Return of Capital to Shareholders by way of Dividend
Payment or Acquisition of Shares via Tender Offer

Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) is pleased to announce
that, 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 intends to offer 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 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 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 will be contained in a shareholder circular to be published on or around
26 February 2024 in the United Kingdom (the "Circular") and an offer to
purchase in the United States (the "Offer to Purchase") and related materials
that will be made available to shareholders.

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 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 will be made available to
shareholders on or around 26 February 2024. The Circular will be available on
the Company's website at ir.div.energy. Copies of the Circular will be
submitted to the National Storage Mechanism and will be available for
inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

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   6.00 p.m. on 1 March 2024
 become a Qualifying Shareholder

 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  10.00 a.m. on 27 March 2024
 CREST

 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       28 March 2024
 elected to participate in the Tender Offer

 Settlement of the Tender Offer consideration in CREST for those shareholders  28 March 2024
 who have elected to participate in the Tender Offer

 

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.

 

For further information please contact:

 

 Diversified Energy Company PLC          +1 973 856 2757
 Doug Kris                               dkris@dgoc.com (mailto:ir@dgoc.com)
 www.div.energy (http://www.div.energy)

 FTI Consulting                          DEC@fticonsulting.com (mailto:dec@fticonsulting.com)
 US & UK Financial Public Relations

 

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.

 

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