Energees Investments and Regal Petroleum Announce Increased Recommended Partial Cash Offer
By Energees Investments And Regal Petroleum, PRNESaturday, February 5, 2011
Not for Release, Publication or Distribution in, Into or From Any Jurisdiction Where to do so Would Constitute a Violation of the Relevant Laws of Such Jurisdiction
LONDON, February 6, 2011 -
- Following the announcement on 10 December 2010 of a recommended cash
offer for Regal, Energees Investments (the principal holding company of
the Smart Holding Group) and Regal are pleased to announce that they
have reached agreement on the terms of a revised, increased, recommended
partial cash offer to be made by Energees Management.
- The revised offer will be structured as a partial offer for up to
224,446,485 Regal Shares (representing approximately 70 per cent. of
the fully diluted share capital of the Company) at 38 pence in cash per
Regal Share (the Increased Partial Offer).
- The terms of the Increased Partial Offer value Regal's fully diluted
share capital at approximately GBP121.8 million and the Regal Shares
subject to the Increased Partial Offer at approximately GBP85.3 million.
- The Increased Partial Offer allows those Regal Shareholders, who accept
in respect of all of their Regal Shares, the potential for a full exit at
38 pence in cash per Regal Share (although acceptances in respect of
more than 70 per cent. of a Shareholder's Regal Shares may be subject to
scaling down as set out in paragraph 2 of this Announcement).
- The consideration of 38 pence per Regal Share under the
terms of the Increased Partial Offer represents a:
- 204% premium to the closing price of 12.5 pence per Regal Share on 24
November 2010, being the last business day before the commencement of
the Offer Period;
- 147% premium to the average closing price of 15.4 pence per Regal
Share for the one month period prior to the commencement of the Offer
Period; and
- 58% premium to the offer price of 24 pence per Regal Share under the
Original Offer.
- The Increased Partial Offer will also allow those Regal Shareholders,
who do not want to accept the Increased Partial Offer in respect of all
of their Regal Shares, to retain an ongoing equity interest in
Regal in respect of some or all of their holding.
- The Increased Partial Offer has a clearly defined timetable, is not
subject to Ukrainian anti-trust clearance (which was received by
Energees Management on 20 January 2011) and will enable (subject to the
Increased Partial Offer being declared wholly unconditional on 20
February 2011) cash consideration to be despatched to Regal Shareholders
on or around 8 March 2011 (once any scaling down exercise has been
completed).
- Smart Holding Group is one of the largest, diversified groups of
companies in Ukraine and brings extensive experience of operating
in Ukraine and in the natural resources sector.
- The Increased Partial Offer will result in the Smart Holding Group
obtaining majority ownership of Regal and will give local,
Ukraine-based shareholder support to Regal management, as well as
providing value and certainty to Regal Shareholders.
- The Regal Directors, who have been so advised by BofA Merrill Lynch,
consider the terms of the Increased Partial Offer to be fair
and reasonable. The background to and reasons for the Regal Directors'
recommendation are summarised in paragraph 6 of this Announcement. In
providing its advice, BofA Merrill Lynch has taken into account the
commercial assessments of the Regal Directors.
- The Regal Directors have terminated Regal's discussions with
Heamoor and Geo-Alliance, having concluded that the Increased Partial
Offer is the best and only firm option currently available to Regal
Shareholders and on the basis that the Increased Partial Offer delivers
greater certainty of value for Regal Shareholders than their proposed
transaction or Regal remaining an independent quoted entity without the
majority ownership of Energees Management.
- The Increased Partial Offer Document is being published, and will be
posted to Regal Shareholders (other than persons in a Restricted
Jurisdiction), today together with the Approval Form and New Form of
Acceptance.
- Energees Management has received irrevocable undertakings to accept
and approve the Increased Partial Offer from certain Regal Shareholders,
as well as Regal Directors, in respect of 42,509,411 Regal Shares,
representing approximately 13.35 per cent. of Regal's existing issued
ordinary share capital. 15,484,800 of these Regal Shares, representing
approximately 4.86 per cent. of the existing issued ordinary share
capital of Regal, relate to long derivative contracts in respect of
which the holder has undertaken to use reasonable endeavours to procure
(so far as it is able) acceptance and approval of the Increased Partial
Offer. Further details are set out below.
- The Increased Partial Offer must be declared unconditional as to
acceptances by 20 February 2011 (unless the Panel otherwise consents)
and Regal Shareholders are therefore urged to return their New Forms of
Acceptance and Approval Forms as soon as possible.
Commenting on the Increased Partial Offer, Alexey Pertin, Director of
Energees Investments and CEO of the Smart Holding Group, stated that:
"Our Increased Partial Offer is a carefully considered means of providing
all shareholders a complete solution today.
Those seeking ongoing equity exposure can select equity and maximise
their ongoing stake in Regal, knowing exactly what they are investing in - a
re-energized Regal with the committed local country backing of Energees
Management - without taking risk on assets, strategy and management which may
be unfamiliar to Regal Shareholders.
In addition, with the 147% one month average premium available under the
Increased Partial Offer, Energees Management is providing Regal shareholders
the option to enjoy a highly attractive and quickly realisable cash exit
(potentially for up to 100% of their shareholding) at highly compelling
valuation levels.
We are excited about supporting Regal in the next stage of its journey
and look forward to working to realise value for all stakeholders, today,
tomorrow and in the future."
Keith Henry, Chairman of Regal, commented:
"Against the background of operational, legal and funding challenges
faced by the Company, your Board is pleased to have reached a much improved
agreement with Energees Management that allows Regal Shareholders to receive
a substantially increased cash element of consideration as well as retaining
the option of maintaining equity exposure in Regal.
Based on work completed to date in connection with the Geo Proposal by
Regal and its advisers, and the Board's assessment of the certainty of being
able to finalise all required workstreams and to announce a binding
transaction with Heamoor and Geo-Alliance, the Board of Regal has concluded
that the Increased Partial Offer represents a superior proposition with
respect to certainty of value by comparison to the Geo Proposal, that the
Increased Partial Offer is the best and only firm option currently available
to Regal Shareholders and therefore intends unanimously to recommend
shareholders to accept and approve the Increased Partial Offer"
This summary should be read in conjunction with, and is subject to, the
full text of this Announcement. The Conditions to, and certain further terms
of, the Increased Partial Offer are set out in the Original Offer Document as
amended by this Announcement, the Increased Partial Offer Document, the
Approval Form and the New Form of Acceptance. Appendix 1 to this Announcement
contains the sources and bases of information used in this Announcement.
Appendix 2 to this Announcement contains details of the irrevocable
undertakings. Appendix 3 to this Announcement contains the definitions of
certain expressions used in this summary and in this Announcement.
In this Announcement all references to: (a) "pounds", "GBP" "p" or
"pence" are to the lawful currency of the United Kingdom; and (b) "dollars",
"$", "Cent" or "cents" are to the lawful currency of the United States.
This Announcement is not intended to be and does not constitute, or form
any part of, an offer to sell or the solicitation of an offer to subscribe
for or buy any securities, nor shall there be any sale, issue or transfer of
the securities referred to in this Announcement in or into any jurisdiction
in contravention of any applicable law.
The Increased Partial Offer will be made solely by means of the Increased
Partial Offer Document and the Approval Form and the New Form of Acceptance
accompanying the Increased Partial Offer Document, which will, together with
the Original Offer Document, contain the full terms and conditions of the
Increased Partial Offer, including details of how it may be accepted.
BofA Merrill Lynch is acting exclusively for Regal and no-one else in
connection with the Increased Partial Offer and will not be responsible to
anyone other than Regal for providing the protections afforded to clients of
BofA Merrill Lynch or for providing advice in relation to the Increased
Partial Offer or any other matter referred to in this Announcement.
UBS is acting exclusively for Energees Investments and Energees
Management and no-one else in connection with the Increased Partial Offer and
will not be responsible to anyone other than Energees Investments and
Energees Management for providing the protections afforded to clients of UBS
or for providing advice in relation to the Increased Partial Offer or any
other matter referred to in this Announcement.
Overseas Jurisdictions
The distribution of this Announcement in jurisdictions other than the UK
and the availability of the Increased Partial Offer to Shareholders who are
not resident in the UK may be affected by the laws of relevant jurisdictions.
Therefore any persons who are subject to the laws of any jurisdiction other
than the UK or Shareholders who are not resident in the UK will need to
inform themselves about, and observe, any applicable requirements. Except as
required by applicable law, copies of this Announcement are not being, and
may not be, mailed or otherwise forwarded, distributed or sent in, into or
from any Restricted Jurisdiction.
In particular, the Increased Partial Offer is not, unless decided
otherwise by Energees Management, being made in or into, and is not capable
of acceptance in or from, any Restricted Jurisdiction. Persons receiving this
Announcement (including, without limitation, custodians, nominees or
trustees) should observe these restrictions and should not send or distribute
documents in or into any Restricted Jurisdiction.
This Announcement has been prepared for the purpose of complying with
English law and the Takeover Code and the information disclosed may not be
the same as that which would have been disclosed if this Announcement had
been prepared in accordance with the laws of jurisdictions outside the UK.
US Holders should note that the Increased Partial Offer relates to the
shares of a UK company, is subject to UK disclosure requirements (which are
different from those of the United States) and that the Increased Partial
Offer Document and any other documents relating to the Increased Partial
Offer have been or will be prepared in accordance with the Takeover Code and
the UK disclosure requirements, format and style, all of which differ from
those in the United States. Financial information included in this
Announcement has been prepared, unless specifically stated otherwise, in
accordance with accounting standards applicable in the UK and thus may not be
comparable to the financial information of United States companies or
companies whose financial statements are prepared in accordance with
generally accepted accounting principles in the United States.
The Increased Partial Offer will be made in the United States pursuant to
applicable US tender offer and securities laws and otherwise in accordance
with the requirements of the Takeover Code. Accordingly, the Increased
Partial Offer will be subject to disclosure and other procedural
requirements, including with respect to withdrawal rights, offer timetable,
settlement procedures and timing of payments that are different from those
applicable under US domestic tender offer procedure and law.
The receipt of cash pursuant to the Increased Partial Offer by a US
Holder may be a taxable transaction for United States federal income tax
purposes and under applicable United States state and local, as well as
foreign and other, tax laws. Each Shareholder is urged to consult his
independent professional adviser immediately regarding the tax consequences
of acceptance of the Increased Partial Offer.
It may be difficult for US Holders to enforce their rights and claims
arising out of United States federal securities laws, since Energees
Management and Regal 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-United
States company or its officers or directors in a non-United States court for
violations of United States securities laws. Further, it may be difficult to
compel a non-United States company and its affiliates to subject themselves
to a United States court's judgement.
To the extent permitted by applicable law, in accordance with normal UK
practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Energees
Management or its nominees, or its brokers (acting as agents) or their
respective affiliates, may from time to time make certain purchases of, or
arrangements to purchase Regal Shares outside of the United States, other
than pursuant to the Increased Partial Offer, until the date on which the
Increased Partial Offer becomes effective, lapses or is otherwise withdrawn.
These purchases may occur either in the open market at prevailing prices or
in private transactions at negotiated prices. Such purchases or arrangements
to purchase will comply with all applicable UK rules, including the Takeover
Code, the rules of the London Stock Exchange and Rule 14e-5(b) of the US
Exchange Act to the extent applicable. Any information about such purchases
will be disclosed as required in the UK, will be reported to the Regulatory
News Service of the London Stock Exchange and will be available on the London
Stock Exchange website at
www.londonstockexchange.com/prices-and-news/prices-news/home.htm.
Forward-Looking Statements
This Announcement contains a number of "forward-looking statements"
relating to Energees Management, Energees Investments, the Smart Holding
Group and the Regal Group and the business sectors in which they operate.
Generally, the words "will", "may", "should", "continue", "believes",
"expects", "intends", "anticipates", "forecast", "plan" and "project" or
similar expressions identify forward-looking statements. Such statements
reflect the relevant company's current views with respect to future events
and are subject to risks, assumptions and uncertainties that could cause the
actual results to differ materially from those expressed or implied in the
forward-looking statements. Many of these risks, assumptions and
uncertainties relate to factors that are beyond the relevant company's
ability to control or estimate precisely, such as future market conditions,
changes in general economic and business conditions, introduction of
competing products and services, lack of acceptance of new products or
services and the behaviour of other market participants. Although the
expectations reflected in such forward-looking statements considered are
reasonable, there can be no assurance that such expectations will prove to
have been correct. You should not, therefore, place undue reliance on these
forward-looking statements, which speak only as of the date of this
Announcement.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in
1% or more of any class of relevant securities of an offeree company or of
any paper offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be, solely in
cash) must make an Opening Position Disclosure following the commencement of
the offer period and, if later, following the announcement in which any paper
offeror is first identified.
An Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any paper offeror(s).
An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must
be made by no later than 3.30 pm (London time) on the 10th business day
following the commencement of the offer period and, if appropriate, by no
later than 3.30 pm (London time) on the 10th business day following the
announcement in which any paper offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a paper
offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any paper offeror must make a Dealing Disclosure if the person
deals in any relevant securities of the offeree company or of any paper
offeror. A Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and (ii) any
paper offeror, save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b)
applies must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an interest
in relevant securities of an offeree company or a paper offeror, they will be
deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and
by any offeror and Dealing Disclosures must also be made by the offeree
company, by any offeror and by any persons acting in concert with any of them
(see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and when any
offeror was first identified. If you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44(0)20-7638-0129.
Publication on website
In accordance with the Takeover Code, a copy of this Announcement, the
Increased Partial Offer Document, the New Form of Acceptance and the Approval
Form will be available at www.regalpetroleum.co.uk and
www.smart-holding.ua by no later than 1.00p.m. (London time) on the
date of this Announcement.
Not for Release, Publication or Distribution in, Into or From Any
Jurisdiction Where to do so Would Constitute a Violation of the Relevant
Laws of Such Jurisdiction
Energees Investments and Regal Petroleum Announce Increased Recommended
Partial Cash Offer
1 Introduction
Following the announcement on 10 December 2010 of a recommended cash
offer for Regal, Energees Investments and Regal are pleased to announce that
they have reached agreement on the terms of a revised, increased, recommended
partial cash offer to be made by Energees Management.
The revised offer will be structured as a partial cash offer for up to
224,446,485 Regal Shares (representing approximately 70 per cent. of the
fully diluted share capital of the Company) at 38 pence per Regal Share (the
Increased Partial Offer).
The consideration of 38 pence per Regal Share under the terms of the
Increased Partial Offer represents a:
- 204% premium to the closing price of 12.5 pence per Regal Share on 24
November 2010, being the last business day before the commencement of
the Offer Period;
- 147% premium to the average closing price of 15.4 pence per Regal Share
for the one month period prior to the commencement of the Offer Period;
and
- 58% premium to the offer price of 24 pence per Regal Share under the
Original Offer.
2 The Increased Partial Offer
The Increased Partial Offer, which will be subject to the Conditions and
further terms set out in Appendix I to the Original Offer Document as amended
by this Announcement, the Increased Partial Offer Document, the Approval Form
and the New Form of Acceptance, will be made on the following basis:
for each Regal Share 38 pence in cash
The Increased Partial Offer values the Company's fully diluted ordinary
share capital at approximately GBP121.8 million and the Regal Shares subject
to the Increased Partial Offer at approximately GBP85.3 million.
Regal Shareholders may accept the Increased Partial Offer in respect of
any number of their Regal Shares or none at all. Subject to the Increased
Partial Offer becoming unconditional in all respects, acceptances will be met
in full to the extent that they are for up to 70 per cent. (the Relevant
Percentage) of an accepting Regal Shareholder's registered holding of Regal
Shares at the Record Date. Acceptances in excess of this amount will be met
to the extent that other Regal Shareholders do not accept the Increased
Partial Offer or accept in respect of less than their Relevant Percentage.
Regal Shares tendered in excess of those representing the Relevant Percentage
of an accepting Regal Shareholder's holding at the Record Date will be
accepted from each Regal Shareholder in the same proportion to the number
tendered to the extent necessary to enable Energees Management to acquire
224,446,485 Regal Shares pursuant to the Increased Partial Offer.
In the event that scaling down, as described above, is required in
respect of any accepting Regal Shareholders, Energees Management will make an
announcement stating the basis of such scaling down by 9.00 a.m. on the
second business day following the closing of the Increased Partial Offer.
Regal Shareholders who have already accepted the Original Offer in
respect of some or all of their Regal Shares will be deemed to have accepted
the Increased Partial Offer in respect of the same number of Regal Shares
(subject to scaling down on the basis set out above to the extent this
exceeds the Relevant Percentage of their holding at the Record Date). Such
Shareholders need not complete a New Form of Acceptance or submit a further
electronic instruction unless they wish to reduce the number of Regal Shares
the subject of their acceptance, however if they approve of the Increased
Partial Offer they should complete and return an Approval Form (once received
by them) in accordance with the procedures set out in the Increased Partial
Offer Document and paragraph 14 below (whether they hold their Regal Shares
in certificated or uncertificated form).
The 224,446,485 Regal Shares for which the Increased Partial Offer is
being made represent approximately 70 per cent. of the fully diluted share
capital of the Company. The Increased Partial Offer will extend, subject to
the Conditions and further terms set out in the Original Offer Document as
amended by this Announcement, the Increased Partial Offer Document, the
Approval Form and the New Form of Acceptance, to any new Regal Shares
unconditionally allotted or issued fully paid (or credited as fully paid) on
or after the date the Increased Partial Offer is made and prior to the Record
Date.
Regal Shareholders should note that the Relevant Percentage has been
calculated on the basis of the fully diluted share capital of the Company
(being 320,637,836 Regal Shares) and it may change slightly if the number of
Regal Shares in issue on the Record Date differs from this number.
The Regal Shares will be acquired pursuant to the Increased Partial Offer
fully paid with full title guarantee and free from all liens, charges,
equitable interests, encumbrances, rights of pre-emption and any other third
party rights or interests of any nature whatsoever and together with all
rights now and hereafter attaching to them, including, without limitation,
the right to receive and retain all dividends and other distributions (if
any) declared, made or paid in respect of the Regal Shares on or after 10
December 2010.
In the event that the Increased Partial Offer becomes unconditional in
all respects, Energees Management will hold Regal Shares carrying more than
50 per cent. of the voting rights of Regal, and Energees Management will be
free (subject to Rule 36.3 of the Takeover Code) to acquire further Regal
Shares without incurring any obligation under Rule 9 of the Takeover Code to
make a general offer.
Following a successful partial offer, Rule 36.3 of the Takeover Code
prevents the offeror, any person acting in concert with the offeror in the
course of the partial offer and any person who is subsequently acting in
concert with any of them from acquiring any interest in the shares of the
offeree during a period of 12 months after the end of the offer period
without the consent of the Panel.
Under Rule 36.5 of the Takeover Code, approval of the Increased Partial
Offer by Regal Shareholders is required and the Increased Partial Offer will
be conditional upon such approval being obtained. For this condition to be
satisfied, Regal Shareholders, who are independent of Energees Management and
persons acting in concert with Energees Management, and represent more than
50 per cent. of the voting rights in Regal must give their approval to the
Increased Partial Offer. If such approval is not obtained, the Increased
Partial Offer will lapse. All Regal Shareholders who approve of the Increased
Partial Offer (whether or not they wish to accept the Increased Partial Offer
and whether they hold their Regal Shares in certificated or uncertificated
form) should therefore complete and return the Approval Form (once received
by them) in accordance with procedures set out in the Increased Partial Offer
Document and paragraph 14 below.
3 Background to and reasons for the Increased Partial Offer
Energees Management has considered the feedback it has received from
Regal Shareholders and has formulated the partial offer structure in order
that Regal Shareholders have the option to receive a combination of cash and
retain part of their holding in Regal Shares. In addition, Regal Shareholders
may elect to accept more cash or retain more shares, although elections for
increased amounts of cash are subject to being scaled down as referred to
above and the ability for a Regal Shareholder to retain more than 30 per
cent. of its shareholding is subject (inter alia) to sufficient acceptances
being received in aggregate to satisfy the acceptance condition set out in
paragraph 13 below.
The price of 38 pence per Regal Share under the Increased Partial Offer
means that Regal Shareholders can receive a highly compelling cash element of
consideration representing a:
- 204% premium to the closing price of 12.5 pence per Regal Share on 24
November 2010, being the last business day before the commencement of
the Offer Period;
- 147% premium to the average closing price of 15.4 pence per Regal Share
for the one month period prior to the commencement of the Offer Period;
and
- 58% premium to the offer price of 24 pence per Regal Share under the
Original Offer.
In addition, the terms of the Increased Partial Offer are such that:
- Regal Shareholders are able to maintain a meaningful stake in Regal of
30 per cent. of their current shareholding, and a higher level than this
should they wish to do so (subject, inter alia, to sufficient acceptances
being received in aggregate to satisfy the acceptance condition set out
in paragraph 13 below) and in either scenario, therefore, share in the
performance of Regal under the new majority ownership of Energees
Management who are familiar with conducting business in Ukraine;
- as existing shareholders in Regal, Regal Shareholders know the business
and assets to which their shareholding relates and can ascribe value to
their shareholding; and
- as set out below, Regal's admission to trading on AIM will be
maintained, preserving the corporate governance and minority shareholder
protections for Regal Shareholders.
Finally, the partial offer structure also enables Regal Shareholders to
exit Regal for cash via the Increased Partial Offer (for at least 70 per
cent. of their shareholding) and/or, subject to market liquidity at the
relevant time, to continue to be able to do so through subsequent sales of
any retained interest in Regal Shares following completion of the Increased
Partial Offer, as Regal will continue to be admitted to trading on AIM.
It should also be noted that Ukrainian anti-trust clearance was received
by Energees Management on 20 January 2011, meaning that condition 1(b) to the
Original Offer and the Increased Partial Offer is now satisfied.
With regard to the proposals announced on 18 January 2011 by Regal to be
made by Heamoor Limited (Heamoor) and Geo-Alliance Oil-Gas Public Limited
(Geo-Alliance), the Increased Partial Offer compares very favourably:
- the cash consideration per Regal Share available to Regal
Shareholders is 13 pence more than the 25 pence per Regal Share
available to Shareholders under the proposed purchasing commitment
or proposed pre-conditional cash offer as set out in the announcement on
18 January 2011 as referred to above (which represents a premium of 52%);
- the strategy for the Regal Group is known under the terms of the
Increased Partial Offer (see paragraph 4 below);
- the Heamoor potential offer includes, as part of the proposed
reverse takeover of Regal, a contribution of Geo-Alliance assets which
may be unfamiliar to Regal shareholders and the value of which may, in
Energees Management's view, not be certain, as, notwithstanding published
data on these assets, such data depends on a number of assumptions, for
instance as to oil price and costs, which, in Energees Management's view,
are uncertain;
- the Heamoor potential offer is more complex than the Increased
Partial Offer and is subject to a number of conditions, including
anti-trust approval(s) of the Anti Monopoly Committee of Ukraine; and
- in order for Heamoor/Geo-Alliance to present its proposals to
shareholders, considerable documentation will need to be agreed, approved
and published, and a general meeting of Regal Shareholders will need to
be held, both of which could contribute to an extended timetable when
compared to the timetable of the Increased Partial Offer. The Increased
Partial Offer has a clearly defined timetable and is available for
acceptance by Regal Shareholders until 20 February 2011 and, subject to
the Increased Partial Offer being declared wholly unconditional on 20
February 2011, cash consideration will be despatched to Regal
Shareholders on or around 8 March 2011 (once any scaling down exercise
has been completed).
4 Strategy and Board composition
Energees Management, as part of the Smart Holding Group, has in place a
clear strategy for supporting Regal's continued development.
Financial Support and Capital Investment
As majority owner of Regal following the Increased Partial Offer
becoming, or being declared, wholly unconditional, Energees Management will
be committed to developing the Regal Group. Energees Management recognises
that in order to develop the Regal business, investment of further capital
will be required. While Energees Management has made no firm decision on the
form of such investment and will utilise the most efficient structure that
meets the requirements of the Regal Group in the prevailing circumstances at
the time, it is anticipated that further investment to fund the Regal Group's
required capital expenditure programme would take the form of shareholder
loans.
It is intended that the injection of further capital will allow Energees
Management and Regal to explore options to increase productivity which, in
addition to growing productivity of Regal's existing wells, may also include,
subject to appropriate opportunities arising at the relevant time which might
benefit the Regal Group, potential acquisitions and/or joint usage of
existing State controlled wells and, subsequently, the exploration and
drilling of new wells.
Experienced management team
Energees Management believes that the experience of the Smart Holding
Group as a whole, and its established track record in operating in Ukraine's
natural resources sector, as well as management with oil & gas expertise,
will facilitate the efficient development of the Regal business. Energees
Management also believes that Regal would form an important platform for
further growth, potentially leading to the creation of a market leader
amongst Ukraine-focused independent E&P players.
Operational and legal support
Energees Management intends to explore with the Regal Directors ways in
which the operational expenses of Regal can be reduced and revenue increased.
As part of the Smart Holding Group, Regal will also have access to its
management team, whom Energees Management believes are well placed to address
the legal issues, particularly in connection with the licence disputes,
facing the Company. Being one of the largest diversified groups of companies
in Ukraine, Smart Holding Group has extensive experience of operating
companies in Ukraine which will be valuable in assisting Regal to address and
seek to mitigate any existing and potential legal risks that may face the
Regal business.
Proposed Board appointments and relationship agreement
Following completion of the Partial Offer, a number of changes to the
Board of Regal are contemplated. It is intended that Alexey Tymofeyev,
currently First Deputy CEO of JSC Smart Holding UA, will become CEO of Regal.
Prior to joining the Smart Holding Group, Alexey held positions at NJSC
Naftogaz of Ukraine, the Ukrainian state oil and gas company, Geo-Alliance
and SC Ukrgazvydobuvannya, a subsidiary of NJSC Naftogaz. It is also intended
that Alexey Pertin, currently a director of Energees Investments and Energees
Management and CEO of JSC Smart Holding UA, and Denis Rudev, a Director of
Energees Management and CFO of JSC Smart Holding UA, will also be appointed
to the Board as executive directors of Regal. Robert Wilde and Hendrikus
Verkuil will continue in their respective roles as Finance Director and Chief
Operating Officer. Keith Henry will continue in his role as Chairman of
Regal, on a non-executive basis and the current, existing non-executive
directors of Regal, Adrian Coates and Alastair Graham, will remain in place.
Energees Management has confirmed that Regal will remain an independently
managed public company and that it has no intention to cancel Regal's
admission to trading on AIM in the next 12 months. Energees Management has
agreed that it will enter into a relationship agreement to regulate the
relationship between the Smart Holding Group and Regal. The principal purpose
of the relationship agreement is to provide that the relationship between
members of the Smart Holding Group and the Regal Group will be conducted
independently and on an arm's length basis. The agreement will address, inter
alia, the composition of the Regal Board (to ensure a fair representation of
non-executive directors and the entitlement of Energees Management to appoint
three directors to the Board (one of which will be the CEO)) and will
preclude any of the directors of Regal, who are interested in the Smart
Holding Group, from voting at meetings of the Board on matters in which the
Smart Holding Group is interested.
5 Recommendation
The Regal Directors, who have been so advised by BofA Merrill Lynch,
consider the terms of the Increased Partial Offer to be fair and reasonable.
In providing its advice, BofA Merrill Lynch has taken into account the
commercial assessments of the Regal Directors.
Accordingly, the Regal Directors intend unanimously to recommend that
Shareholders accept and approve the Increased Partial Offer.
The Regal Directors who hold Regal Shares entered into irrevocable
undertakings to accept the Original Offer in respect of their own beneficial
holdings (and, where applicable, those of their spouses) totalling, in
aggregate, 577,245 Regal Shares, representing approximately 0.18 per cent. of
Regal's existing issued share capital (the Director Irrevocable Undertakings)
and have tendered acceptances in respect of such Regal Shares. These
acceptances will be treated as acceptances of the Increased Partial Offer in
respect of 577,245 Regal Shares. The Director Irrevocable Undertakings remain
in full force and effect and binding even in the event of a higher competing
offer for Regal and the Regal Directors can not withdraw such acceptances. In
addition, the Regal Directors will tender Approval Forms in respect of the
Regal Shares the subject of the Director Irrevocable Undertakings. Further
details on the Director Irrevocable Undertakings (together with the further
irrevocable undertakings referred to in paragraph 7 below) are contained in
Appendix 2 to this Announcement.
6 Background to and reasons for the recommendation
In September 2010, following a set of disappointing drilling results and
against the backdrop of Regal licences in Ukraine being challenged, Regal
initiated a strategic review. The review concluded that the development of
the Company's Ukrainian asset required further technical studies to evaluate
the reservoir potential and any impact on the Company's reserves estimate, as
well as to determine how much investment capital would be required to fund
future development. As a result of the suspension of production in Ukraine,
the disappointing results from drilling and the requirement for further
technical studies, Regal considers it likely that its current published
reserves would be revised downwards, both in terms of quantum and category,
in the event that the proposed technical studies and the subsequent trials of
alternative completion technologies, such as hydraulic fracturing, were to
prove unsuccessful in improving well productivity.
As part of the strategic review, the Company entered into negotiations
with several parties, including Energees Management and Heamoor and
Geo-Alliance, with respect to potential corporate options. This resulted in
the announcement of the Original Offer by Regal and Energees Investments on
10 December 2010.
The Board of Regal recommended the Original Offer from Energees
Management of 24 pence per Regal Share in cash, having concluded that the
Original Offer represented better value and certainty for Regal Shareholders
than the Company remaining an independent quoted entity at that time. In
recommending the Original Offer, the Board of Regal took the following facts
into consideration:
- the technical difficulties associated with bringing the wells to
sustainable commercial production rates;
- the uncertainty in the outcomes of further reservoir appraisal and the
potential impact, if any, on the reserves estimate;
- loss of operational revenue as a result of the suspension order and
uncertainty as to when production may be allowed to resume;
- additional capital requirements for further appraisal and field
development; and
- the ongoing legal and political risks surrounding the Ukrainian
operations.
Shortly after the Original Offer was announced, Heamoor announced,
pursuant to Rule 2.4 of the Takeover Code, its interest in making an offer to
acquire the Company or, agreeing a potential business combination with the
Company. On 18 January 2011, Regal announced the details of a non-binding
proposal from Heamoor and Geo-Alliance (the Geo Proposal), which involved,
inter alia, a proposed reverse take-over of Geo-Alliance by Regal, with an
option for Regal Shareholders to sell their shares to Heamoor at a price of
25 pence per Regal Share for three months following completion of the reverse
take-over. The proposed reverse take-over of Geo-Alliance envisaged that
Regal would acquire Geo-Alliance, in exchange for the issue of new Regal
Shares to the shareholders of Geo-Alliance, representing not more than 70 per
cent. of Regal's enlarged share capital post the issue of new Regal Shares.
As such transaction would constitute a reverse take-over under the AIM Rules,
the announcement of the proposed transaction with Geo-Alliance resulted in
the suspension of trading in Regal Shares on AIM.
To date, with the aim of securing for Regal Shareholders a superior offer
to the Original Offer of 24 pence per share, the Regal Board and Regal's
advisers have been working intensively with Heamoor and Geo-Alliance towards
reaching a firm, binding announcement of a transaction on the terms outlined
in the announcement of 18 January 2011. Given the complex nature of the Geo
Proposal, which involves extensive due diligence and documentary requirements
for a reverse take-over, the required re-admission of the enlarged group to
trading on AIM, as well as the timetable constraints imposed by the Takeover
Code, Regal negotiated and agreed with Geo-Alliance and its shareholders a
cost coverage agreement whereby the fees, costs and expenses properly
incurred by the Regal Group solely in connection with the consideration,
negotiation and documenting of the Geo Proposal, would be reimbursed, subject
to a maximum amount.
The Increased Partial Offer has been announced today by Energees
Management on the condition that Regal terminate its discussions with Heamoor
and Geo-Alliance towards reaching a binding transaction on the terms
previously announced.
Based on work completed to date in connection with the Geo Proposal by
Regal and its advisers and the Board's assessment of the certainty of being
able to finalise all required workstreams and to announce a binding
transaction with Heamoor and Geo-Alliance by 10 February 2011, the Board of
Regal has concluded that the Increased Partial Offer represents a superior
proposition with respect to certainty of value by comparison to the Geo
Proposal.
The Board of Regal has concluded that the Increased Partial Offer is the
best and only firm option currently available to Regal Shareholders. The
Board's recommendation of the Increased Partial Offer has taken the following
into consideration:
- the revised, increased, cash consideration per share offered
by Energees Management;
- Energees Management's receipt of approval from the Anti-Monopoly
Commission of Ukraine;
- the ability for Regal Shareholders to maintain a meaningful stake
in Regal under the new majority ownership of Energees Management;
- greater certainty of value for Regal Shareholders than: a) the
proposed transaction with Heamoor and Geo-Alliance; or b) the Company
remaining an independent quoted entity without the majority ownership of
Energees Management;
- Smart Group's experience and successful record in Ukraine, as
well as its commitment to provide the operational, legal, management and
financial support to Regal;
- there is no guarantee that any offer or proposal from Heamoor
and/or Geo-Alliance will ultimately be put to Regal Shareholders within
the timetable requirements of the Takeover Code; and
- the partial offer structure enables Regal Shareholders, depending
on their objectives, to elect to receive more or less cash as
consideration (subject to scaling down on the basis set out in paragraph
2 of this Announcement) and allows those seeking ongoing equity exposure
to Regal to select equity and maximise their ongoing stake in Regal.
7 Irrevocable undertakings
In addition to the irrevocable undertakings given by the Regal Directors
(as referred to in paragraph 5 above) Energees Management has received: (i)
irrevocable undertakings from each of Renaissance Securities (Cyprus) Limited
and Hadron Capital LLP to accept and approve the Increased Partial Offer in
respect of a total of 26,447,366 Regal Shares (representing approximately
8.31 per cent. of the existing issued ordinary share capital of Regal); and
(ii) as part of the irrevocable undertaking from Hadron Capital LLP, an
undertaking to use its reasonable endeavours to procure (so far as it is
able) that a further 15,484,800 Regal Shares (in respect of which it holds
its interest through long derivative contracts and representing approximately
4.86 per cent. of the existing issued ordinary share capital of Regal) will
be assented to, and approve, the Increased Partial Offer (the New Irrevocable
Undertakings). The New Irrevocable Undertakings remain binding including in
the event of a competing offer being made for Regal and will only lapse if
the Increased Partial Offer lapses or is withdrawn.
Energees Management has therefore received (in aggregate and taking into
account the Director Irrevocable Undertakings referred to in paragraph 5
above) irrevocable undertakings to accept and approve (or, in the case of the
New Irrevocable Undertaking given by Hadron Capital LLP to use its reasonable
endeavours to procure (so far as it is able) that the 15,484,800 Regal Shares
represented by long derivative contracts are assented to and approve) the
Increased Partial Offer in respect of 42,509,411 Regal Shares, representing
approximately 13.35 per cent. of Regal's existing issued ordinary share
capital.
Further details of the Director Irrevocable Undertakings and the New
Irrevocable Undertakings are contained in Appendix 2 to this Announcement.
8 Financing of the Increased Partial Offer and cash confirmation
Full acceptance of the Increased Partial Offer will result in the payment
by Energees Management of approximately GBP85.3 million in cash.
The aggregate cash consideration payable by Energees Management will be
provided from existing cash resources.
UBS Investment Bank, financial adviser to Energees Investments and
Energees Management, is satisfied that resources are available to Energees
Management sufficient to satisfy full acceptance of the Increased Partial
Offer.
9 Regal LTIP
The Increased Partial Offer will extend to any Regal Shares issued or
unconditionally allotted or issued fully paid (or credited as fully paid) on
or after the date the Increased Partial Offer is made and before the Record
Date (or such earlier date as Energees Management may, subject to the
Takeover Code, determine), including those Regal Shares allotted or issued as
a result of the exercise or vesting of options or awards under the Regal
LTIP. Appropriate proposals were made by Energees Management to Regal LTIP
option holders on 23 December 2010. Forms of instruction that have already
been returned in connection with such proposals will remain valid with regard
to proposals to be made in connection with the Increased Partial Offer
(subject to scaling down on the basis set out in paragraph 2 of this
Announcement and subject to any written instructions to the contrary received
from the relevant Regal LTIP option holders). Further details in connection
with proposals to be made to Regal LTIP holders will be sent as soon as
practicable.
10 Inducement Fee
Energees Management and Regal have entered into an inducement fee
agreement dated 6 February 2011, under the terms of which Regal has agreed to
pay Energees Management an inducement fee of GBP852,896 (equal to one per
cent. of the value of the Regal Shares the subject of the Increased Partial
Offer based on the price of 38 pence per Regal Share under the Increased
Partial Offer). The inducement fee would be payable if, prior to the
Increased Partial Offer lapsing or being withdrawn, one or more Alternative
Offers are announced and any of such Alternative Offers subsequently become
effective, become or are declared unconditional in all respects or are
otherwise completed. An Alternative Offer would include implementation of the
proposals (announced on 18 January 2011 by Regal) made by Heamoor and
Geo-Alliance, or any revisions thereto.
11 Interests in Regal
Neither Energees Management nor any of the directors of Energees
Management, nor, so far as the directors of Energees Management are aware,
any person acting in concert with Energees Management for the purposes of the
Increased Partial Offer, has any interest in, right to subscribe for, or has
borrowed or lent any Regal Shares or securities convertible or exchangeable
into Regal Shares (Regal Securities), nor does any such person have any short
position (whether conditional or absolute and whether in the money or
otherwise) including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person to
purchase or take delivery or any arrangement in relation to Regal Securities.
For these purposes, "arrangement" includes any indemnity or option
arrangement or any agreement or understanding, formal or informal, of
whatever nature, relating to Regal Securities which may be an inducement to
deal or refrain from dealing in such securities.
12 Overseas Shareholders
The availability of the Increased Partial Offer or the distribution of
this Announcement to Shareholders who are not resident in the UK may be
affected by the laws of relevant jurisdictions in which they are located.
Shareholders who are in doubt regarding such matters should consult an
appropriate independent professional adviser in the relevant jurisdiction
without delay.
This Announcement does not constitute an offer for sale of any securities
or an offer or an invitation to purchase any securities.
The Increased Partial Offer Document will be published and will be
despatched to Regal Shareholders today, together with the New Form of
Acceptance and Approval Form. Shareholders are advised to read carefully the
Increased Partial Offer Document as it will contain further details in
relation to overseas shareholders of Regal.
The Increased Partial Offer will be made in the United States pursuant to
applicable US tender offer and securities laws and otherwise in accordance
with the requirements of the Takeover Code. Accordingly, the Increased
Partial Offer will be subject to disclosure and other procedural
requirements, including with respect to withdrawal rights, offer timetable,
settlement procedures and timing of payments that are different from those
applicable under US domestic tender offer procedures and law.
13 Terms and conditions of the Increased Partial Offer
The Increased Partial Offer will be on the terms and subject to the
conditions set out in Appendix I to the Original Offer Document save as set
out in this Announcement, the Increased Partial Offer Document, the Approval
Form and the New Form of Acceptance and in particular as set out below:
- references in such Appendix I to the 'Offer' shall be deemed to be
references to the Increased Partial Offer;
- except where the context requires otherwise, any references in such
Appendix I to 'Form of Acceptance' means the New Form of Acceptance;
- the Increased Partial Offer will not be subject to the condition set
out in paragraph 1(a) of such Appendix I which shall be deleted
accordingly, and instead the following new conditions 1(a) and 1(a)(a)
will be substituted:
1(a) valid acceptances being received (and not, where permitted,
withdrawn) in respect of 224,446,485 Regal Shares (or such lesser number of
Regal Shares as Energees Management may decide) by not later than 1.00 p.m.
(London time) on 20 February 2011 (or such later time(s) and/or date(s) as
Energees Management may, with the consent of the Panel or in accordance with
the Takeover Code and applicable US tender offer rules and securities laws,
decide), provided that this condition shall not be satisfied unless Energees
Management and/or any of its wholly-owned subsidiaries shall have acquired,
or agreed to acquire, whether pursuant to the Increased Partial Offer or
otherwise, shares in Regal carrying in aggregate more than 50 per cent. of
the voting rights then normally exercisable at general meetings of Regal. For
the purposes of this condition, shares which have been unconditionally
allotted but not issued before the Increased Partial Offer becomes or is
declared unconditional as to acceptances, whether pursuant to the exercise of
any outstanding subscription or conversion rights or otherwise, shall be
deemed to carry the voting rights they will carry on being entered into the
register of members of Regal; and
1(a)(a) Regal Shareholders holding shares carrying over 50 per cent. of
the voting rights of Regal not held by Energees Management (and persons
acting in concert with it) approving the making of the Increased Partial
Offer;
- the consideration to be paid to Regal Shareholders pursuant to the
Increased Partial Offer will be paid on the detailed terms set out in
the Increased Partial Offer Document; and
- the Increased Partial Offer will be open for acceptance until 20
February 2011 (or such later time(s) and/or date(s) as Energees
Management may, with the consent of the Panel or in accordance with the
Takeover Code and applicable US tender offer rules and securities laws,
decide).
The Increased Partial Offer will be governed by English law and will be
subject to the jurisdiction of the English courts. The Increased Partial
Offer will be subject to the applicable requirements of the Takeover Code,
the Panel, the London Stock Exchange and the Financial Services Authority.
In accordance with applicable US tender offer rules, the Increased
Partial Offer will remain open for at least 10 business days from the date of
the Increased Partial Offer Document.
14 General
Save as set out in this Announcement, the Increased Partial Offer
Document, the Approval Form and the New Form of Acceptance, the Increased
Partial Offer will be made on the same terms and subject to the same
conditions as set out in the Original Offer Document. The Increased Partial
Offer Document setting out the full terms of the Increased Partial Offer will
be sent to Regal Shareholders (other than persons in a Restricted
Jurisdiction) today together with the Approval Form and New Form of
Acceptance. In deciding whether or not to accept the Increased Partial Offer,
Regal Shareholders should rely solely on the information contained in, and
follow the procedures set out in, the Original Offer Document, the Increased
Partial Offer Document, the Approval Form, the Original Form of Acceptance
and the New Form of Acceptance.
As stated above, under Rule 36.5 of the Takeover Code, approval of the
Increased Partial Offer by Regal Shareholders is required and the Increased
Partial Offer will be conditional upon such approval being obtained. For this
condition to be satisfied, Regal Shareholders who are independent of Energees
Management and persons acting in concert with Energees Management and
represent more than 50 per cent. of the voting rights in Regal must give
their approval to the Increased Partial Offer. If such approval is not
obtained, the Increased Partial Offer will lapse.
Action to be taken by Regal Shareholders who have not accepted the
Original Offer
Regal Shareholders who want to accept the Increased Partial Offer should:
- once they have received the New Form of Acceptance and if they hold
their Regal Shares, or any of them, in certificated form (that is, not in
CREST), complete, sign and return the New Form of Acceptance (together
with their share certificate(s) and other document(s) of title) in
accordance with the instructions set out in the Increased Partial Offer
Document as soon as possible and, in any event, so as to be received by
the Registrars not later than 1.00p.m. on 20 February 2011; or
- once they have received the Increased Partial Offer Document, and if
they hold their Regal Shares, or any of them, in uncertificated form
(that is, in CREST), follow the procedure for electronic acceptance
through CREST in accordance with the instructions set out in the
Increased Partial Offer Document so that the relevant TTE Instruction
settles as soon as possible and, in any event, not later than 1.00 p.m.
on 20 February 2011. In this context, Regal Shareholders should note
that 20 February 2011 is a Sunday, so to be effective the TTE Instruction
must in fact settle in CREST not later than Friday 18 February 2011.
Shareholders who hold their Regal Shares as a CREST sponsored member
should refer to their CREST sponsor, as only their CREST sponsor will be
able to send the necessary TTE Instruction(s) to CREST.
If Regal Shareholders approve of the Increased Partial Offer (whether or
not they wish to accept the Increased Partial Offer, and whether they hold
their Regal Shares in certificated form or uncertificated form) they should
complete and return the Approval Form (once received by them) in accordance
with the procedures set out in the Increased Partial Offer Document as soon
as possible and, in any event, so as to be received by the Registrars not
later than 1.00 p.m. on 20 February 2011. If approval of the Increased
Partial Offer is not given by Regal Shareholders who are independent of
Energees Management and persons acting in concert with Energees Management
and represent more than 50 per cent. of the voting rights in Regal the
Increased Partial Offer will lapse.
Action to be taken by Regal Shareholders who have accepted the Original
Offer
Acceptances of the Original Offer which have not been validly withdrawn
are deemed to be acceptances of the Increased Partial Offer in respect of the
same number of Regal Shares (subject to scaling down on the basis set out
above to the extent this exceeds the Relevant Percentage of the Shareholder's
holding (or deemed holding) at the Record Date).
Regal Shareholders who have accepted the Original Offer need not complete
a New Form of Acceptance (in the case of Regal Shares held in certificated
form) or submit a further electronic instruction (in the case of Regal Shares
held in uncertificated form) unless they wish to reduce the number of Regal
Shares the subject of their acceptance, however if they approve of the
Increased Partial Offer (whether they hold their Regal Shares in certificated
form or uncertificated form) they should complete and return the Approval
Form (once received by them) in accordance with the procedures set out in the
Increased Partial Offer Document as soon as possible and, in any event, so as
to be received by the Registrars not later than 1.00 p.m. on 20 February
2011. If approval of the Partial Offer is not given by Regal Shareholders as
outlined above, the Increased Partial Offer will lapse.
Regal Shareholders who have accepted the Original Offer and wish to
reduce the number of Regal Shares the subject of their acceptance should:
- once they have received the New Form of Acceptance, in respect of Regal
Shares held in certificated form (that is, not in CREST), lodge with the
Registrars, in accordance with the instructions set out in the Increased
Partial Offer Document and prior to 1.00 p.m. on 20 February 2011, a
validly completed New Form of Acceptance together with written
confirmation that this replaces the Original Form of Acceptance
previously sent to the Registrars; or
- once they have received the Increased Partial Offer Document, in
respect of Regal Shares held in uncertificated form (that is, in CREST)
send, in accordance with the instructions set out in the Increased
Partial Offer Document, an ESA Instruction to settle in CREST in relation
to each electronic acceptance to be withdrawn. Shareholders should then
send, in accordance with the instructions set out in the Increased
Partial Offer Document, a TTE Instruction to Euroclear in respect of
the reduced number of Regal Shares which such Shareholder wishes to be
the subject of their acceptance. The aforementioned ESA Instruction and
TTE Instruction should both be sent as soon as possible and, in any
event, so as to settle not later than 1.00 p.m. on 20 February 2011. In
this context, Regal Shareholders should note that 20 February 2011 is a
Sunday, so to be effective the ESA Instruction and the TTE Instruction
must in fact settle in CREST not later than Friday 18 February 2011.
Shareholders who hold their Regal Shares as a CREST sponsored member
should refer to their CREST sponsor, as only their CREST sponsor will be
able to send the necessary ESA Instruction(s) to CREST; and
- once they have received the Approval Form, whether they hold their
Regal Shares in certificated form or uncertificated form, complete and
lodge with the Registrars, in accordance with the instructions set out
in the Increased Partial Offer Document and prior to 1.00 p.m. on 20
February 2011, a validly completed Approval Form.
Your attention is drawn to the further information contained in the
Appendices to this Announcement which form part of, and should be read in
conjunction with, this Announcement.
Appendix 1 to this Announcement contains the sources and bases of certain
information contained in this Announcement.
Appendix 2 to this Announcement contains details of the irrevocable
undertakings.
Appendix 3 to this Announcement contains the definitions of certain terms
used in this Announcement.
This Announcement is not intended to be and does not constitute, or form
any part of, an offer to sell or the solicitation of an offer to subscribe
for or buy any securities, nor shall there be any sale, issue or transfer of
the securities referred to in this Announcement in or into any jurisdiction
in contravention of any applicable law.
The Increased Partial Offer will be made solely by means of the Increased
Partial Offer Document and the Approval Form and the New Form of Acceptance
accompanying the Increased Partial Offer Document, which will, together with
the Original Offer Document, contain the full terms and conditions of the
Increased Partial Offer, including details of how it may be accepted.
BofA Merrill Lynch is acting exclusively for Regal and no-one else in
connection with the Increased Partial Offer and will not be responsible to
anyone other than Regal for providing the protections afforded to clients of
BofA Merrill Lynch or for providing advice in relation to the Increased
Partial Offer or any other matter referred to in this Announcement.
UBS is acting exclusively for Energees Investments and Energees
Management and no-one else in connection with the Increased Partial Offer and
will not be responsible to anyone other than Energees Investments and
Energees Management for providing the protections afforded to clients of UBS
or for providing advice in relation to the Increased Partial Offer or any
other matter referred to in this Announcement.
Overseas Jurisdictions
The distribution of this Announcement in jurisdictions other than the UK
and the availability of the Increased Partial Offer to Shareholders who are
not resident in the UK may be affected by the laws of relevant jurisdictions.
Therefore any persons who are subject to the laws of any jurisdiction other
than the UK or Shareholders who are not resident in the UK will need to
inform themselves about, and observe, any applicable requirements. Except as
required by applicable law, copies of this Announcement are not being, and
may not be, mailed or otherwise forwarded, distributed or sent in, into or
from any Restricted Jurisdiction.
In particular, the Increased Partial Offer is not, unless decided
otherwise by Energees Management, being made in or into, and is not capable
of acceptance in or from, any Restricted Jurisdiction. Persons receiving this
Announcement (including, without limitation, custodians, nominees or
trustees) should observe these restrictions and should not send or distribute
documents in or into any Restricted Jurisdiction.
This Announcement has been prepared for the purpose of complying with
English law and the Takeover Code and the information disclosed may not be
the same as that which would have been disclosed if this Announcement had
been prepared in accordance with the laws of jurisdictions outside the UK.
US Holders should note that the Increased Partial Offer relates to the
shares of a UK company, is subject to UK disclosure requirements (which are
different from those of the United States) and that the Increased Partial
Offer Document and any other documents relating to the Increased Partial
Offer have been or will be prepared in accordance with the Takeover Code and
the UK disclosure requirements, format and style, all of which differ from
those in the United States. Financial information included in this
Announcement has been prepared, unless specifically stated otherwise, in
accordance with accounting standards applicable in the UK and thus may not be
comparable to the financial information of United States companies or
companies whose financial statements are prepared in accordance with
generally accepted accounting principles in the United States.
The Increased Partial Offer will be made in the United States pursuant to
applicable US tender offer and securities laws and otherwise in accordance
with the requirements of the Takeover Code. Accordingly, the Increased
Partial Offer will be subject to disclosure and other procedural
requirements, including with respect to withdrawal rights, offer timetable,
settlement procedures and timing of payments that are different from those
applicable under US domestic tender offer procedure and law.
The receipt of cash pursuant to the Increased Partial Offer by a US
Holder may be a taxable transaction for United States federal income tax
purposes and under applicable United States state and local, as well as
foreign and other, tax laws. Each Shareholder is urged to consult his
independent professional adviser immediately regarding the tax consequences
of acceptance of the Increased Partial Offer.
It may be difficult for US Holders to enforce their rights and claims
arising out of United States federal securities laws, since Energees
Management and Regal 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-United
States company or its officers or directors in a non-United States court for
violations of United States securities laws. Further, it may be difficult to
compel a non-United States company and its affiliates to subject themselves
to a United States court's judgement.
To the extent permitted by applicable law, in accordance with normal UK
practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Energees
Management or its nominees, or its brokers (acting as agents) or their
respective affiliates, may from time to time make certain purchases of, or
arrangements to purchase Regal Shares outside of the United States, other
than pursuant to the Increased Partial Offer, until the date on which the
Increased Partial Offer becomes effective, lapses or is otherwise withdrawn.
These purchases may occur either in the open market at prevailing prices or
in private transactions at negotiated prices. Such purchases or arrangements
to purchase will comply with all applicable UK rules, including the Takeover
Code, the rules of the London Stock Exchange and Rule 14e-5(b) of the US
Exchange Act to the extent applicable. Any information about such purchases
will be disclosed as required in the UK, will be reported to the Regulatory
News Service of the London Stock Exchange and will be available on the London
Stock Exchange website at
www.londonstockexchange.com/prices-and-news/prices-news/home.htm.
Forward-Looking Statements
This Announcement contains a number of "forward-looking statements"
relating to Energees Management, Energees Investments, the Smart Holding
Group and the Regal Group and the business sectors in which they operate.
Generally, the words "will", "may", "should", "continue", "believes",
"expects", "intends", "anticipates", "forecast", "plan" and "project" or
similar expressions identify forward-looking statements. Such statements
reflect the relevant company's current views with respect to future events
and are subject to risks, assumptions and uncertainties that could cause the
actual results to differ materially from those expressed or implied in the
forward-looking statements. Many of these risks, assumptions and
uncertainties relate to factors that are beyond the relevant company's
ability to control or estimate precisely, such as future market conditions,
changes in general economic and business conditions, introduction of
competing products and services, lack of acceptance of new products or
services and the behaviour of other market participants. Although the
expectations reflected in such forward-looking statements considered are
reasonable, there can be no assurance that such expectations will prove to
have been correct. You should not, therefore, place undue reliance on these
forward-looking statements, which speak only as of the date of this
Announcement.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in
1% or more of any class of relevant securities of an offeree company or of
any paper offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be, solely in
cash) must make an Opening Position Disclosure following the commencement of
the offer period and, if later, following the announcement in which any paper
offeror is first identified.
An Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any paper offeror(s).
An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must
be made by no later than 3.30 pm (London time) on the 10th business day
following the commencement of the offer period and, if appropriate, by no
later than 3.30 pm (London time) on the 10th business day following the
announcement in which any paper offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a paper
offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any paper offeror must make a Dealing Disclosure if the person
deals in any relevant securities of the offeree company or of any paper
offeror. A Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and (ii) any
paper offeror, save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b)
applies must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an interest
in relevant securities of an offeree company or a paper offeror, they will be
deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and
by any offeror and Dealing Disclosures must also be made by the offeree
company, by any offeror and by any persons acting in concert with any of them
(see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. If you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44(0)20-7638-0129.
Publication on website
In accordance with the Takeover Code, a copy of this Announcement, the
Increased Partial Offer Document, the New Form of Acceptance and the Approval
Form will be available at www.regalpetroleum.co.uk and
www.smart-holding.ua by no later than 1.00p.m. (London time) on the
date of this Announcement.
Appendix 1
Sources and bases of information
In this Announcement:
1 The value of the Increased Partial Offer based on the offer price of 38
pence per Regal Share is calculated on the basis of the fully diluted
number of Regal Shares in issue referred to in paragraph 2 below.
2 As at the close of business on 4 February 2011 (being the last business
day prior to the date of this Announcement), Regal had in issue 318,366,876
Regal Shares. The ISIN Number for Regal Shares is GB0031775819.
3 The fully diluted share capital of Regal as at 4 February 2011 (being
320,637,836 Regal Shares) is calculated on the basis of:
- the number of Regal Shares referred to in paragraph 2 above; and
- any further Regal Shares which may be issued on or after the
Announcement Date on the exercise or vesting of options or awards under
the Regal LTIP, amounting to 2,270,960 Regal Shares as at 4 February
2011.
Warrants to subscribe for 846,600 Regal Shares at a subscription price of
GBP1.50 per share are also outstanding, but have not been taken into account
in determining the fully diluted share capital as they are "out of the
money".
4 Unless otherwise stated, all prices and closing prices for Regal Shares
are closing middle market quotations derived from the Daily Official List.
5 The premium calculations to the price per Regal Share have been
calculated by reference to:
- a price of 12.5 pence per Regal Share, being the closing price on 24
November 2010, the last business day prior to the commencement of the
Offer Period; and
- the average closing price per Regal Share of 15.4 pence over the one
month period ended 24 November 2010 is derived from data provided by
Datastream.
6 The reference to the price per Regal Share under the Increased Partial
Offer being 13 pence more than the proposed purchasing commitment or proposed
pre-conditional cash offer by Heamoor and Geo-Alliance (and other references
to such proposals by them) are derived from the terms of such proposals as
set out in the announcement released by Regal with the consent of Heamoor and
Geo-Alliance on 18 January 2011.
Appendix 2
Details of irrevocable undertakings
Part A - New Irrevocable Undertakings
Energees Management has received the following irrevocable undertakings
from each of Renaissance Securities (Cyprus) Limited and Hadron Capital LLP
to accept and approve the Increased Partial Offer in respect of a total of
41,932,166[1] Regal Shares, representing approximately 13.17 per cent. of the
existing issued ordinary share capital of Regal. These irrevocable
undertakings remain binding including in the event of a competing offer being
made for Regal and will only lapse if the Increased Partial Offer lapses or
is withdrawn.
Name Number of Percentage of Percentage
Regal the issued of the
Shares share capital fully
of Regal (per diluted
cent.) share
capital of
Regal (per
cent.)
Hadron Capital LLP [1] 17,484,800 5.49 5.45
Renaissance Securities 24,447,366 7.68 7.62
(Cyprus) Limited
[1] Of the 17,484,800 Regal Shares the subject of the irrevocable
undertaking given by Hadron Capital LLP, 15,484,800 are shares in respect of
which Hadron Capital LLP holds its interest through long derivative
contracts. Whilst Hadron Capital LLP has undertaken to use its reasonable
endeavours to procure (so far as it is able) that the underlying Regal Shares
represented by such long derivative contracts which are the subject of the
irrevocable undertaking given by it will be assented to, and approve, the
Increased Partial Offer, it should be noted that Hadron Capital LLP has no
contractual rights to call for the delivery of any Regal Shares underlying
the relevant long derivative contracts or to direct how the votes attaching
to such shares are cast. There can therefore be no guarantee that all (or
any) of the underlying Regal Shares represented by the long derivative
contracts and the subject of the irrevocable given by Hadron Capital LLP will
in fact be assented to or approve the Increased Partial Offer.
Part B - Director Irrevocable Undertakings
The Regal Directors entered into irrevocable undertakings to accept the
Original Offer in respect of their own beneficial holdings (and, where
applicable, those of their spouses) totalling, in aggregate, 577,245 Regal
Shares, representing approximately 0.18 per cent. of Regal's existing issued
share capital and have tendered acceptances in respect of such Regal Shares.
These acceptances will be treated as acceptances of the Increased Partial
Offer in respect of 577,245 Regal Shares. The irrevocable undertakings remain
in full force and effect and binding even in the event of a higher competing
offer for Regal and the Regal Directors can not withdraw such acceptances. In
addition, the Regal Directors will tender Approval Forms in respect of the
Regal Shares the subject of their irrevocable undertakings.
Name of Regal Number of Regal Percentage of Percentage of
Director Shares the issued share the fully
capital of Regal diluted share
(per cent.) capital of
Regal (per
cent.)
Keith Henry 150,000 0.05% 0.05%
Adrian Coates 77,245 0.02% 0.02%
Harry Verkuil 230,000 0.07% 0.07%
Robert Wilde 120,000 0.04% 0.04%
Appendix 3
Definitions
The following definitions apply throughout this Announcement,
unless the context requires otherwise:
AIM the AIM market of the London Stock
Exchange
Alternative Offer any offer, scheme of arrangement, or
other similar transaction relating to
the acquisition or disposal of all or
substantially all of the shares or
assets of Regal or which would result
in a change of control (being an
interest in 50 per cent. or more) of
Regal
Announcement means this announcement, dated 6
February 2011
Approval Form the GREEN form of approval relating
to the Increased Partial Offer which
will accompany the Increased Partial
Offer Document
Board, Board of Regal and the board of directors of Regal
Regal Board
BofA Merrill Lynch Merrill Lynch International, a
subsidiary of Bank of America
Corporation
Closing Price the middle market quotation at the
close of business as derived from the
Daily Official List
Companies Act 2006 the Companies Act 2006, as amended
Conditions the conditions to the Increased
Partial Offer which are set out in
Appendix I to the Original Offer
Document as amended by this
Announcement, the Increased Partial
Offer Document, the Approval Form and
the New Form of Acceptance
CREST the relevant system (as defined in
the Regulations) in respect of which
Euroclear UK & Ireland Limited is the
Operator (as defined in the
Regulations)
CREST Manual the manual issued by Euroclear UK &
Ireland Limited from time to time
CREST member a person who has been admitted by
Euroclear UK & Ireland Limited as a
system-member (as defined in the
Regulations)
CREST participant a person who is, in relation to
CREST, a system-participant (as
defined in the Regulations)
CREST sponsor a CREST participant admitted to CREST
as a CREST sponsor
CREST sponsored member a CREST member admitted to CREST as a
sponsored member
Daily Official List the AIM Appendix of the Daily
Official List of the London Stock
Exchange
Energees Investments Energees Investments Limited, a
company incorporated in the Republic
of Cyprus with registered number
172997, and the principal holding
company of the Smart Holding Group
Energees Management Energees Management Limited, a
company incorporated in the Republic
of Cyprus with registered number
252398, and a wholly-owned subsidiary
of Energees Investments
ESA Instruction an Escrow Account Adjustment input
(AESN) transaction type "ESA" (as
described in the CREST Manual)
Increased Partial Offer the recommended partial cash offer to
be made to acquire up to 224,446,485
Regal Shares on the terms and subject
to the Conditions set out in Appendix
I to the Original Offer Document as
amended by this Announcement, the
Increased Partial Offer Document, the
Approval Form and the New Form of
Acceptance including where the
context so requires, any subsequent
revision, variation, extension or
renewal of such offer
Increased Partial Offer the document to be published and
Document despatched to Shareholders and others
relating to the Increased Partial
Offer
London Stock Exchange London Stock Exchange plc
New Form of Acceptance the new PINK form of acceptance and
authority relating to the Increased
Partial Offer which will accompany
the Increased Partial Offer Document
Offer Period the offer period (as defined in the
Takeover Code) relating to Regal,
which commenced on 25 November 2010
Original Form of Acceptance the WHITE form of acceptance and
authority relating to the Original
Offer which accompanied the Original
Offer Document
Original Offer the recommended cash offer by
Energees Management to acquire the
Regal Shares on the terms and
conditions set out in the Original
Offer Document
Original Offer Document the document dated 22 December 2010
dispatched to Shareholders and others
and relating to the Original Offer
Panel the Panel on Takeovers and Mergers
Record Date close of business on the business day
immediately preceding the date on
which the Increased Partial Offer
becomes wholly unconditional or such
earlier date as Energees Management
may, with the consent of the Panel,
decide
Regal or the Company Regal Petroleum plc, a company
incorporated in England and Wales
with company number 04462555
Regal Directors the directors of Regal, and Regal
Director shall mean any of them
Regal Group Regal and its subsidiary undertakings
from time to time
Regal LTIP the Regal Long Term Incentive Plan
Regal Shares ordinary shares of 5 pence each in
the capital of Regal
Regulations the Uncertificated Securities
Regulations 2001 (SI 2001 No. 3755)
(as amended)
Regulatory Information any of the services set out in
Service Appendix 3 to the Listing Rules
published by the United Kingdom
Listing Authority
Relevant Percentage 70 per cent. (this has been
calculated on the basis of the fully
diluted share capital of the Company
(being 320,637,836 Regal Shares) and
it may change slightly if the number
of Regal Shares in issue on the
Record Date differs from this number)
Restricted Jurisdiction any jurisdiction where local laws or
regulations may result in a
significant risk of civil, regulatory
or criminal exposure for Energees
Investments, Energees Management or
Regal if information or documentation
concerning the Increased Partial
Offer is sent or made available to
Shareholders in that jurisdiction
Shareholders or Regal registered holders of Regal Shares
Shareholders from time to time
Smart Holding Group Energees Investments and its
subsidiary undertakings and parent
undertakings, and any other
subsidiary undertakings of its parent
undertakings, in each case from time
to time
subsidiary and subsidiary have the meaning given to them by the
undertaking Companies Act 2006
Takeover Code the City Code on Takeovers and
Mergers
TTE Instruction a Transfer to Escrow instruction (as
described in the CREST Manual) in
relation to Regal Shares in
uncertificated form meeting the
requirements set out in the Increased
Partial Offer Document
UK or United Kingdom the United Kingdom of Great Britain
and Northern Ireland
US or United States the United States of America, its
territories and possessions, any
state of the United States and the
District of Columbia
US Exchange Act the United States Securities Exchange
Act of 1934, as amended
US Holders holders of Regal Shares ordinarily
resident in the US or with a
registered address in the US, and any
custodian, nominee or trustee holding
Regal Shares for persons in the US or
with a registered address in the US
In this Announcement:
- all references to: (a) "pounds", "GBP" "p" or "pence" are to the lawful
currency of the United Kingdom; and (b) "dollars", "$", "Cent" or "cents"
are to the lawful currency of the United States;
- the singular shall include the plural and vice versa, and words
importing the masculine gender shall include the feminine or neutral
gender;
- all references to legislation are to English legislation, unless the
contrary is indicated, and any reference to any provision of any
legislation includes any amendment, modification, re-enactment or
extension thereof; and
- references to time are to London time.
Enquiries:
Energees Management
Alexey Pertin Telephone: +380445903026
Denis Rudev
UBS
(financial adviser to Energees Investments and Energees
Management)
Allison Harding-Jones Telephone: +44-20-7567-8000
Thomas Onions
Regal Petroleum plc
Keith Henry, Chairman Telephone: +44-20-7408-9500
Robert Wilde, Finance Director
BofA Merrill Lynch
(financial adviser to Regal)
Anya Weaving Telephone: +44-20-7996-1000
Paul Frankfurt
Strand Hanson Limited
(Nominated Adviser to Regal)
Simon Raggett Telephone: +44-20-7409-3494
Rory Murphy
Energees Management Alexey Pertin, Denis Rudev, +380445903026, UBS, (financial adviser to Energees Investments and Energees Management) Allison Harding-Jones, Thomas Onions, Telephone: +44-20-7567-8000, Regal Petroleum plc, Keith Henry, Chairman, Robert Wilde, Finance Director, +44-20-7408-9500, BofA Merrill Lynch, (financial adviser to Regal), Anya Weaving, Paul Frankfurt, +44-20-7996-1000, Strand Hanson Limited (Nominated Adviser to Regal) Simon Raggett, Rory Murphy, +44-20-7409-3494
Tags: Energees Investments And Regal Petroleum, February 6, London, United Kingdom
