REG - Hurricane Energy PLC - Update on Matched Bargain Facility and DCUs

Hurricane EnergyAnnouncement

08/06/2023 17:30

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RNS Number : 1676C  Hurricane Energy PLC  08 June 2023

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

 

8 June 2023

 

RECOMMENDED ACQUISITION

of

Hurricane Energy plc ("Hurricane")

by

Prax Exploration & Production PLC ("Prax")

 

Update on Matched Bargain Facility and Deferred Consideration Units

 

On 16 March 2023, the boards of directors of Hurricane and Prax announced that
they had reached agreement on the terms of a recommended acquisition of the
entire issued, and to be issued, share capital of Hurricane by Prax (the
"Acquisition"), to be effected by means of a Court-sanctioned scheme of
arrangement under Part 26 of the Companies Act (the "Scheme"). The scheme
document in respect of the Acquisition (the "Scheme Document") was published
and made available to Hurricane Shareholders on 6 April 2023. Defined terms
used but not defined in this announcement have the meaning given to them in
the Scheme Document.

Further to the announcement issued earlier today noting that the Scheme has
become Effective, Hurricane and Prax are pleased to provide an update on the
matched bargain facility and the Deferred Consideration Units pursuant to the
Scheme.

Matched Bargain Facility and Deferred Consideration Units Update

As announced on 16 March 2023 and detailed in the Scheme Document, Prax
intends to put in place a matched bargain facility upon the Scheme becoming
Effective and upon which the Deferred Consideration Units could be traded.
Prax has appointed JP Jenkins to provide a matched bargain facility on which
the Deferred Consideration Units could be traded. JP Jenkins is a liquidity
venue for unlisted or unquoted assets in companies, enabling shareholders and
prospective investors to buy and sell unlisted or unquoted assets on a matched
bargain basis.

Prax has appointed Computershare, Hurricane's existing registrar, to act as
registrar for the Deferred Consideration Units.

In order to participate in the matched bargain facility, the Deferred
Consideration Units need to be held in CREST. An International Securities
Identification Number ("ISIN") for each of the Class I DCUs and Class II DCUs
has been issued and the relevant CREST applications will be submitted shortly.

As detailed in the Scheme Document, each Class I DCU will entitle the Class I
DCU Holder to receive Loan Note(s) (subject to applicable securities laws) in
an amount equal to the DCU Cash Amount, the principal of which will be
redeemable in cash on the redemption date. The ISIN for the Class I DCUs is
GB00BQS92045.

Alternatively, Scheme Shareholders will receive Class II DCUs. Each Class II
DCU will entitle the Class II DCU Holder to receive further cash, in an amount
equal to the DCU Cash Amount. The ISIN for the Class II DCUs is GB00BQS92151.

It is expected that Scheme Shareholders who hold their Scheme Shares in
uncertificated form through CREST will receive their Deferred Consideration
Units through CREST and the DCU Cash Amount, when payable, will be paid
through CREST.

Scheme Shareholders who hold their Scheme Shares in certificated form will
receive certificated Deferred Consideration Units and the DCU Cash Amount,
when payable, will be paid via cheque. Further information on how to
dematerialise certificated Deferred Consideration Units so that they are
capable of being held in uncertificated form through CREST, and thus tradeable
on the matched bargain facility, will be sent in due course to relevant Scheme
Shareholders.

An amended and restated DCU Deed Poll allowing for electronic payments will
shortly be uploaded to Hurricane's website at www.hurricaneenergy.com and
Prax's microsite at www.prax.com/offer-for-hurricane-energy-plc. There is no
change to the economics or rights of the DCU Holders.

An announcement regarding the beginning of trading on the matched bargain
facility operated by JP Jenkins will be made on the JP Jenkins website at
www.jpjenkins.com and Prax's website at www.prax.com/news
(http://www.prax.com/news) at the appropriate time.

DCU Representative

Pursuant to the DCU Deed Poll, Hurricane has appointed Geopoint Advisory
Limited, of which Tim Chapman is the sole Director and shareholder, to act as
the DCU Representative. Defined terms used but not defined in this section
have the meaning given to them in the DCU Deed Poll.

The DCU Representative will be responsible for acting as the primary point of
contact for the DCU Holders with Prax, the Independent Accountant (if so
appointed) and any third parties engaged by the DCU Representative to act on
behalf of the DCU Holders in respect of any Matters in Dispute. The
obligations of the DCU Representative will be owed to the DCU Holders and not
to Prax. The DCU Representative shall be entitled (but not obliged) at the DCU
Representative's sole discretion to consult with individual DCU Holders or
seek the direction of the DCU Holders by means of a DCU Holders' Majority
Resolution. Mr. Chapman is entirely independent of both Hurricane and Prax.

Tim Chapman is an international capital markets specialist residing in London
with more than 30 years of experience spanning the globe. His career includes
25 years in investment banking roles with large financial institutions
including JP Morgan Chase, CIBC World Markets, and finally RBC Capital Markets
where he was head of international oil and gas. Mr. Chapman's career has
focused on corporate strategy and valuation, regularly providing expert advice
to many companies on seminal M&A transactions and capital raises. His
experience within the oil and gas sector is diverse, including upstream,
downstream and oilfield services companies. In 2015, Mr. Chapman founded
Geopoint Advisory Limited which provides independent advice to energy
companies. He is also a director of Valeura Energy and certain Petrogas North
Sea subsidiaries. Mr. Chapman started his professional life as a geologist and
graduated from Earth Sciences at Oxford University.

Information Updates on Deferred Consideration Units following the end of the
Offer Period

Prax intends to provide upstream press releases and information pertaining to
DCU Holders, for example future upstream acquisitions, if and when relevant,
on the news section of the Prax website at www.prax.com/news.

 

Contacts:

 Hurricane Energy plc                                                             +44 (0)1483 862820

 Antony Maris, Chief Executive Officer

 communications@Hurricaneenergy.com (mailto:communications@Hurricaneenergy.com)

 Stifel Nicolaus Europe Limited                                                   +44 (0)20 7710 7600

 Financial Adviser

 Callum Stewart / Jason Grossman
 Investec Bank plc                                                                +44 (0)20 7597 5970

 Joint Corporate Broker to Hurricane

 Chris Sim / Charles Craven / Jarrett Silver
 Vigo Consulting                                                                  +44 (0)20 7390 0230

 Public Relations Adviser to Hurricane

 Patrick d'Ancona / Ben Simons

 Hurricane@vigoconsulting.com (mailto:Hurricane@vigoconsulting.com)
 Prax                                                                             +44 (0) 20 3757 4986

 Alessandro Agostini, Head of Exploration and Production

 (Care of Camarco)
 Gneiss Energy Limited                                                            +44 (0) 20 3983 9263

 Financial Adviser to Prax

 Jon Fitzpatrick / Paul Weidman
 Camarco                                                                          +44 (0) 20 3757 4986

 Public Relations Adviser to Prax

 Billy Clegg / Georgia Edmonds / Violet Wilson / Hugo Liddy

 prax@camarco.co.uk (mailto:prax@camarco.co.uk)

Important Notices

Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated
in the United Kingdom by the Financial Conduct Authority, is acting
exclusively for Hurricane and no one else in connection with the Acquisition,
the other matters referred to in this announcement and the Scheme Document,
and will not be responsible to anyone other than Hurricane for providing the
protections afforded to clients of Stifel or for providing advice in
connection with the Acquisition or any matter or arrangement referred to
herein.

Investec Bank plc ("Investec"), which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority in the United Kingdom, is acting exclusively
for Hurricane and no one else in connection with the Acquisition, the other
matters referred to in this announcement and the Scheme Document, and will not
be responsible to anyone other than Hurricane for providing the protections
afforded to clients of Investec or for providing advice in connection with the
Acquisition or any matter or arrangement referred to herein.

Gneiss Energy Limited ("Gneiss"), which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively for
Prax and no one else in connection with the Acquisition, the other matters
referred to in this announcement and the Scheme Document, and will not be
responsible to anyone other than Prax for providing the protections afforded
to clients of Gneiss or for providing advice in connection with the
Acquisition or any matter or arrangement referred to herein.

Further information

This announcement is for information purposes only and does not constitute an
offer to sell or an invitation to purchase any securities or the solicitation
of an offer to buy any securities, pursuant to the Acquisition or otherwise.
The Acquisition will be made solely by means of the Scheme Document (or any
document by which the Acquisition is made) which will contain the full terms
and conditions of the Acquisition, including details of how to vote in respect
of the Acquisition.  Any decision in respect of, or otherwise in response to,
the Acquisition should be made only on the basis of the information contained
in the Scheme Document (or any other document by which the Acquisition is
made).

The release, publication or distribution of this announcement in, into or from
certain jurisdictions other than the United Kingdom may be restricted by the
laws of those jurisdictions.  Persons who are not resident in the United
Kingdom or who are subject to the laws of other jurisdictions should inform
themselves of, and observe, any applicable requirements.  Any failure to
comply with the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction.  To the fullest extent permitted by
applicable law, the companies and persons involved in the Acquisition disclaim
any responsibility or liability for the violation of such restrictions by any
person.  This document does not constitute an offer or invitation to purchase
or subscribe for any securities or a solicitation of an offer to buy any
securities pursuant to this announcement or otherwise in any jurisdiction in
which such offer or solicitation is unlawful.

All shareholders, particularly Overseas Shareholders, should consult their own
legal and tax advisers with regard to the legal and tax consequences of the
Scheme to their particular circumstances.

This announcement does not constitute a prospectus or prospectus equivalent
document.

Overseas Shareholders

The availability of the Acquisition to Hurricane Shareholders who are not
resident in and citizens of the United Kingdom may be affected by the laws of
the relevant jurisdictions in which they are located or of which they are
citizens.  Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable legal or regulatory requirements of
their jurisdictions.  In particular, the ability of persons who are not
resident in the United Kingdom to vote their Hurricane Shares with respect to
the Scheme at the Court Meeting, or to appoint another person as proxy to vote
at the Court Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located.  Any failure to comply with
the applicable restrictions may constitute a violation of the securities laws
of any such jurisdictions.  To the fullest extent permitted by applicable
law, the companies and persons involved in the Acquisition disclaim any
responsibility or liability for the violation of such restrictions by any
person.

It is the responsibility of each Overseas Shareholder to obtain any
governmental, exchange control or other consents which may be required, or to
ensure the compliance with other necessary formalities which are required to
be observed and the payment of any issue, transfer or other taxes due in such
jurisdiction.

Unless otherwise determined by Prax and Hurricane or required by the Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such use, means, instrumentality or from
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.  Accordingly, copies
of this announcement and all documents relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction where to do so
would violate the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Acquisition (including
custodians, nominees and trustees) must not mail or otherwise distribute or
send them in, into or from such jurisdictions where to do so would violate the
laws in that jurisdiction.  Doing so may render invalid any related purported
vote in respect of the Acquisition.  If the Acquisition is implemented (with
the consent of the Panel) by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), the Takeover Offer may not be
made directly or indirectly, in or into, or by the use of mails or any means
or instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of
any Restricted Jurisdiction and the Takeover Offer may not be capable of
acceptance by any such use, means, instrumentality or facilities.

Notice to Hurricane Shareholders in the United States

Hurricane Shareholders in the United States should note that the Acquisition
relates to the securities of a company incorporated in England and is proposed
to be effected by means of a scheme of arrangement under the laws of England
and Wales.  The Scheme Document and certain other documents relating to the
Acquisition have been or will be prepared in accordance with the laws of
England and Wales and UK procedural and disclosure requirements, which differ
from the disclosure requirements, style and format of US proxy solicitation or
tender offer rules.  A transaction effected by means of a scheme of
arrangement is not subject to the tender offer rules or the proxy rules under
the US Securities Exchange Act of 1934, as amended (the "US Exchange Act").
If, in the future, Prax exercises its right to implement the Acquisition by
way of a Takeover Offer in lieu of the Scheme, such offer will be made in
compliance with applicable United States laws and regulations, including,
without limitation, any applicable exemptions under the US Exchange Act and,
subject, in the case of participation by Hurricane Shareholders resident in
the United States, to the availability of an exemption (if any) from the
registration requirements under the US Securities Act of 1933 (the "US
Securities Act") and the securities laws of any state or other jurisdiction of
the United States.

The financial information with respect to Hurricane included in the Scheme
Document and other documentation related to the Acquisition has been or will
have been prepared in accordance with IFRS and thus may not be comparable to
the financial information of US companies or companies whose financial
statements are prepared in accordance with generally accepted accounting
principles in the United States.

The Deferred Consideration Units to be issued under the Scheme have not been
and will not be registered under the US Securities Act, or under any laws of
any securities regulatory authority of any state other jurisdiction of the
United States and may only be offered or sold in the United States in reliance
on an exemption from the registration requirements of the US Securities Act.
Neither this announcement nor the Scheme Document shall constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale of
the Deferred Consideration Units in any state of the United States in which
such offer, solicitation or sale would be unlawful prior to qualification
under the securities laws of any such state.  The Deferred Consideration
Units are expected to be issued in reliance upon the exemption from the
registration requirements of the US Securities Act provided by Section
3(a)(10) thereof.  Hurricane Shareholders (whether or not US persons) who are
or will be affiliates (within the meaning of the US Securities Act) of
Hurricane prior to, or of Prax after, the Effective Date will be subject to
certain US transfer restrictions relating to the Deferred Consideration Units
received pursuant to the Scheme as further described in Part IX (Additional
Information for Overseas Shareholders) of the Scheme Document.

For the purpose of qualifying for the exemption from the registration
requirements of the US Securities Act provided by Section 3(a)(10) with
respect to the Deferred Consideration Units, the Court will be advised that
its sanctioning of the Scheme will be relied on as an approval of the Scheme
following a hearing on its fairness to Hurricane Shareholders, at which
hearing all such Hurricane Shareholders are entitled to attend in person, by
authorised representative, by proxy or through counsel, to support or oppose
the sanctioning of the Scheme and with respect to which notification has been
given to all such Hurricane Shareholders.

A Hurricane Shareholder who is an "affiliate" (within the meaning of the US
Securities Act) of Hurricane prior to, or of Prax after, the Effective Date,
will receive "restricted securities" as defined in Rule 144 under the US
Securities Act.  Under applicable US federal securities laws, persons who are
or will be "affiliates", within the meaning of the US Securities Act may not
resell the Deferred Consideration Units received as a result of the Scheme
without registration under the US Securities Act, except pursuant to the
applicable resale provisions of Rule 144 under the US Securities Act or
another applicable exemption from registration or in a transaction not subject
to registration (including a transaction that satisfies the applicable
requirements of Regulation S under the US Securities Act).  "Affiliates" of a
company are generally defined as persons who directly, or indirectly through
one or more intermediaries, control, or are controlled by, or are under common
control with, that company.  Whether a person is an affiliate of a company
for purposes of the US Securities Act depends on the circumstances, but
affiliates can include certain officers, directors and significant
shareholders.  Persons who believe they may be affiliates should consult
their own legal advisers before any sale of securities received in the Scheme.

None of the securities referred to in this announcement or the Scheme Document
have been approved or disapproved by the US Securities Exchange Commission or
any US state securities commission, nor have any such authorities passed
judgment upon the fairness or the merits of the Acquisition or determined if
the Scheme Document is accurate or complete.  Any representation to the
contrary is a criminal offence in the United States.

It may be difficult for US Shareholders to enforce their rights and claims
arising out of US federal securities laws, since Hurricane and Prax are
located in countries other than the United States, and some or all of their
officers and directors may be residents of countries other than the United
States.  US holders may not be able to sue a non-US company or its officers
or directors in a non-US court for violations of US securities laws.
Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's judgement.

The receipt of cash or Deferred Consideration Units pursuant to the Scheme by
US Shareholders as consideration for the transfer of its Hurricane Shares
pursuant to the Scheme will likely be a disposal for US federal income tax
purposes and under applicable US state and local, as well as foreign and
other, tax laws.  Each Hurricane Shareholder is urged to consult his
independent professional adviser immediately regarding the tax consequences of
the Acquisition applicable to such US Shareholder.

If Prax were to elect to implement the Acquisition by means of a Takeover Offer, in accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, the Prax Group, certain affiliated companies and their nominees or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Hurricane Shares outside the United States, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn.  If such purchases or arrangements to purchase were to be made, they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and comply with applicable law, including the US Exchange Act.  Any information about such purchases will be disclosed as required in the United Kingdom, will be reported via a Regulatory Information Service of the London Stock Exchange and available on the London Stock Exchange website at:
www.londonstockexchange.com. (http://www.londonstockexchange.com/)

Forward looking statements

This announcement (including information incorporated by reference in this
announcement), oral statements regarding the Acquisition and other information
published by Prax, the Prax Group, Hurricane or the Hurricane Group contains
statements about Prax, the Prax Group, Hurricane and the Hurricane Group that
are or may be deemed to be forward-looking statements.  All statements other
than statements of historical facts included in this announcement may be
forward-looking statements.  Without limitation, any statements preceded or
followed by or that include the words "targets", "plans", "believes",
"expects", "aims", "intends", "will", "may", "should", "would", "could",
"anticipates", "estimates", "projects" or "strategy" or words or terms of
similar substance or the negative thereof, are forward-looking statements.
Forward-looking statements include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of the Prax Group or the Hurricane Group's operations following the
Acquisition; and (iii) the effects of government regulation on the Prax
Group's or the Hurricane Group's business.

Such forward-looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions.  They are not guarantees of future performance.  Such
forward-looking statements involve known and unknown risks and uncertainties
that could significantly affect expected results and are based on certain key
assumptions.  Many factors could cause actual results to differ materially
from those projected or implied in any forward-looking statements.  These
factors include, but are not limited to, the satisfaction of the conditions to
the Acquisition, as well as additional factors, such as changes in political
and economic conditions, changes in the level of capital investment, retention
of key employees and success of business and operating initiatives.  Due to
such uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of the date
hereof.  All subsequent oral or written forward-looking statements
attributable to Prax or any of its members, directors, officers or employees
or any persons acting on their behalf are expressly qualified in their
entirety by the cautionary statement above.  Each of Prax and Hurricane
disclaims any obligation to update any forward-looking or other statements
contained herein, except as required by applicable law.

No Profit Forecasts or Estimates

No statement in this announcement is intended as a profit forecast or estimate
for any period and no statement in this announcement should be interpreted to
mean that earnings or earnings per share for Hurricane for the current or
future financial years would necessarily match or exceed the historical
published earnings or earnings per share for Hurricane.

Publication on Website and Availability of Hard Copies

This announcement will be available free of charge, subject to certain
restrictions relating to persons resident in Restricted Jurisdictions, on
Hurricane's website at www.hurricaneenergy.com
(http://www.hurricaneenergy.com/) and Prax's microsite at
www.prax.com/offer-for-hurricane-energy-plc/
(http://www.prax.com/offer-for-hurricane-energy-plc/) by no later than 12.00
noon (London time) on the business day following the date of this
announcement.

Neither the content of any website referred to in this announcement nor the
content of any website accessible from hyperlinks is incorporated into, or
forms part of, this announcement.

In accordance with Rule 30.3 of the Code, you may request a hard copy of this
announcement by contacting Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6AH, Telephone: 0370 707 1733.  You may also
request that all future documents, announcements and information to be sent to
you in relation to the Acquisition should be in hard copy form.

For persons who receive a copy of this announcement in electronic form or via
a website notification, a hard copy of this announcement will not be sent
unless so requested.  Such persons may also request that all future
documents, announcements and information in relation to the Acquisition be
sent to them in hard copy form.

 

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