REG - Riverstone Energy Ld - Tender Offer and Notice of EGM

Riverstone EnergyAnnouncement

23/02/2024 07:00

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RNS Number : 1873E  Riverstone Energy Limited  23 February 2024

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  (#_ftn1)

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        11.00 a.m. on 22 March 2024
 General Meeting
 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      by 5 April 2024
 consideration, as appropriate
 Despatch of balance share certificates and crediting of CREST accounts with     by 5 April 2024
 Shares not purchased

 

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
(http://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.

 

 

 1  (#_ftnref1)  On the basis of the USD: GBP exchange rate of 1:0.79 on 22
February 2024.

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