Petroleum Africa
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Thursday, May 1, 2014
Those who keep track of independents operating in Africa can prepare to cross another one off the list as Heritage Oil is about to fall to the takeover bug. Energy Investments Global Ltd. (Bidco), a wholly-owned subsidiary of Al Mirqab Capital, has reached an agreement with Heritage’s independent directors on the terms of a recommended cash offer through which the entire issued and to be issued ordinary share capital of Heritage will be acquired by Bidco.
Under the terms of the offer, each scheme shareholder will be entitled to receive 320 pence in cash per scheme share. The offer price values Heritage at £924 million or $1.5 billion, which is a premium of approximately 25.2% on its closing price in the LSE the day before the announcement.
It is intended that the offer will be implemented by way of a court sanctioned scheme of arrangement under Article 125 of the Jersey Companies Law although Al Mirqab reserves the right to proceed by way of a Takeover Offer, should it wish to do so and with panel consent.
Al Mirqab and Anthony Buckingham have entered into a set of agreements which document how the parties intend to work together following completion of the offer. Anthony Buckingham is Heritage’s largest shareholder, having, as of April 29 approximately 34% of the issued ordinary share capital of Heritage. As part of such arrangements, Anthony Buckingham has agreed to retain a 20% interest in Heritage for at least five years post the effective date (and will transfer his remaining interest under the terms of the offer, being approximately 14% of the issued ordinary share capital of Heritage); and serve as an adviser to Heritage on an exclusive basis for a minimum of five years and have the right to appoint one director out of seven to the board of Heritage.
The Buckingham Arrangements are subject to the approval of independent shareholders representing a majority of the votes cast on a poll (either in person or by proxy) at the independent shareholders’ meeting and such approval is a condition to the scheme becoming effective. In addition to the agreements set out in the Buckingham Agreements, Anthony Buckingham has irrevocably committed to Al Mirqab that he will support the offer and not accept any competing offer made prior September 29.
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