Increased Recommended Final Cash Offer

Source Press Release
Company Medco Energi International tbk PTOphir Energy plc 
Tags Corporate Deals, Deals, Upstream Activities
Date March 21, 2019

Introduction

On 30 January 2019, the boards of Medco, Medco Global and Ophir announced that they had reached agreement on the terms of a recommended acquisition pursuant to which Medco Global will acquire the entire issued and to be issued ordinary share capital of Ophir (other than any ordinary shares held by Ophir in treasury) (the “Acquisition”) at a price of 55 pence in cash for each Ophir Share (the “Announcement”), to be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.

The scheme document in respect of the Acquisition (the “Scheme Document”) was published and made available to Ophir Shareholders on 1 March 2019.

Capitalised terms in this announcement, unless otherwise defined, have the same meanings as set out in the Scheme Document.

The Increased Offer Price

The boards of Medco, Medco Global and Ophir are pleased to announce today that they have reached agreement on the terms of an increased recommended all cash offer by Medco Global to acquire the entire issued and to be issued share capital of Ophir (other than any ordinary shares held by Ophir in treasury) (the “Increased Offer”).

Under the terms of the Increased Offer, Ophir Shareholders will be entitled to receive:

for each Ophir Share:                  57.5 pence in cash (the “Final Offer Price”)

  • The Increased Offer values the entire issued and to be issued share capital of Ophir at approximately £408.4 million.
  • The Final Offer Price represents a premium of approximately:
    • 73.2 per cent. to the closing price of 33.20 pence per Ophir Share on 28 December 2018 (being the last Business Day before the announcement of Medco’s possible offer for Ophir);
    • 68.5 per cent. to the volume weighted average share price for the one-month period ended 28 December 2018 (being the last Business Day before the announcement of Medco’s possible offer for Ophir) of 34.13 pence per Ophir Share; and
    • 49.8 per cent. to the volume weighted average share price for the three-month period ended 28 December 2018 (being the last Business Day before the announcement of Medco’s possible offer for Ophir) of 38.38 pence per Ophir Share.
  • Aggregate entitlements of Ophir Shareholders under the terms of the Increased Offer shall be rounded down to the nearest whole pence.

Medco Global announces that the Final Offer Price is final and will not be increased, except that Medco Global reserves the right to increase the amount of the Final Offer Price if there is an announcement on or after the date hereof of an offer or a possible offer for Ophir by a third party offeror or potential offeror.

Irrevocable Undertakings and support for the Increased Offer

In addition to the previously announced Irrevocable Undertakings received by Medco Global as set out in the Scheme Document (the “Director Irrevocable Undertakings”), which remain binding in relation to the Increased Offer, Medco Global has received an irrevocable undertaking from Sand Grove Capital Management LLP (acting as discretionary investment manager for Sand Grove Opportunities Master Fund Ltd and Sand Grove Tactical Fund LP) to vote (or procure the voting) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting (or, in the event that the Increased Offer is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) in respect of a total of 132,517,896 Ophir Shares, representing, in aggregate, approximately 18.73 per cent. of the share capital of Ophir in issue on 19 March 2019, being the last Business Day prior to the date of this announcement (the “Shareholder Irrevocable Undertaking”).

The Shareholder Irrevocable Undertaking will cease to be binding if: (a) the Increased Offer is not completed on or prior to the Long Stop Date; or (b) the Increased Offer lapses or is withdrawn in accordance with its terms and, in either case, no new, revised or replacement Scheme or Takeover Offer is or has been announced by Medco in accordance with Rule 2.7 of the Code at the same time.

Recommendation

The Ophir Directors, who have been so advised by Morgan Stanley and Lambert Energy Advisory as to the financial terms of the Increased Offer, consider the terms of the Increased Offer to be fair and reasonable. In providing its advice to the Ophir Directors,  Morgan Stanley and Lambert Energy Advisory have taken into account the commercial assessments of the Ophir Directors.

In addition, the Ophir Directors consider the terms of the Increased Offer to be in the best interests of Ophir and the Ophir Shareholders as a whole.

Accordingly, the Ophir Directors recommend unanimously that Ophir Shareholders vote in favour of the Scheme at the Court Meeting and Ophir Shareholders vote in favour of the Special Resolution at the General Meeting, as each of the Ophir Directors who hold beneficial interests in Ophir Shares have irrevocably undertaken to do in respect of all of their respective beneficial holdings, totalling 984,271 Ophir Shares, representing in aggregate approximately 0.14 per cent. of Ophir’s issued share capital as at the close of business on the Latest Practicable Date.

Ophir Shareholder Meetings

The boards of Medco, Medco Global and Ophir remind Ophir Shareholders that the Court Meeting and the General Meeting in connection with the Increased Offer will both be held at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ, United Kingdom on 25 March 2019. The Court Meeting will start at 10.00 a.m. and the General Meeting will start at 10.15 a.m. (or as soon thereafter as the Court Meeting has concluded or been adjourned).

As further detailed in the Scheme Document, to become effective, the Scheme will require, among other things, the approval of Ophir Shareholders at the Court Meeting and the passing of the Special Resolution to be proposed at the General Meeting. It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of the opinion of the Ophir Shareholders.

Ophir Shareholders who have not already done so are therefore strongly urged to complete, sign and return the Forms of Proxy in accordance with the instructions printed thereon, or, alternatively, to appoint a proxy electronically or through CREST, for both the Court Meeting and the General Meeting, as soon as possible and by no later than the following times and dates:

  • BLUE Forms of Proxy for the Court Meeting by 10.00 a.m. on 21 March 2019; and
  • YELLOW Forms of Proxy for the General Meeting by 10.15 a.m. on 21 March 2019.

Alternatively, BLUE Forms of Proxy (but NOT YELLOW Forms of Proxy) may be handed to Ophir’s Registrar, Equiniti Limited, or the Chairman of the Court Meeting before the start of the Court Meeting at 10.00 a.m. on 25 March 2019. However, in the case of the General Meeting, unless the YELLOW Form of Proxy is returned by the time and date mentioned above, it will be invalid.

BLUE Forms of Proxy already submitted in respect of the Court Meeting and YELLOW Forms of Proxy submitted in respect of the General Meeting in accordance with the instructions set out therein, and electronic proxy appointments, will continue to be valid in respect of the Increased Offer.

The completion and return of a Form of Proxy does not prevent an Ophir Shareholder from attending, speaking at or voting in person at the Court Meeting and the General Meeting, or any adjournments thereof, if such Ophir Shareholder wishes and is entitled to do so. Ophir Shareholders who have already completed and returned their Forms of Proxy and wish to change their voting instructions as a result of the Increased Offer should contact Ophir’s Registrar, Equiniti Limited, for details as to how to do this. The contact details for Ophir’s Registrar, Equiniti Limited, are set out at the end of this announcement and in the Scheme Document.

Financing the Increased Offer

The cash consideration payable under the terms of the Increased Offer (together with costs and expenses payable in connection with the Increased Offer) will be funded by the proceeds of the Bridge Credit Agreement entered into by Medco Global for the purposes of the Acquisition with and arranged by Standard Chartered Bank and from Medco and Medco Global’s existing cash resources. Details of the Bridge Credit Agreement are set out in the Scheme Document.

Medco Global has put in place USD to GBP hedges for the purposes of satisfying its obligations to Ophir Shareholders in connection with the Acquisition, for which purposes Medco Global has entered into a foreign exchange agreement with Standard Chartered Bank (Singapore) Limited.

Standard Chartered Bank, financial adviser to Medco and Medco Global, is satisfied that sufficient resources are available to Medco Global to satisfy the full cash consideration payable to the Ophir Shareholders under the terms of the Increased Offer.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd