$5.6 BN DEAL - Emirates Nat.Oil Co IRSH Recommended Cash Offer for Dragon Oil plc
Emirates Nat.Oil Co (IRSH) - Recommended Cash Offer for Dragon Oil plc
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
15 June 2015
For immediate release
RECOMMENDED CASH OFFER
By
EMIRATES NATIONAL OIL COMPANY LTD. (ENOC) L.L.C. ("ENOC")
FOR THE SHARES IN
DRAGON OIL PLC ("DRAGON OIL")
NOT ALREADY OWNED BY ENOC
Summary
· The board of ENOC and the independent committee of the board of Dragon Oil (the "Independent Committee") are pleased to announce that they have reached agreement on the terms of a recommended cash offer for the entire issued and to be issued share capital of Dragon Oil not already owned by ENOC.
· Under the terms of the Offer, Dragon Oil Shareholders will be entitled to receive:
750 pence in cash for each Dragon Oil Share
· The Offer values the entire issued and to be issued share capital of Dragon Oil at approximately £3.7 billion and the issued and to be issued share capital of Dragon Oil not already owned by ENOC at approximately £1.7 billion.
· The Offer will be conducted by way of a contractual takeover offer and will be conditional upon (amongst other things) the receipt of valid acceptances in respect of a majority of the Dragon Oil minority shareholders (equivalent to approximately 23 per cent. of Dragon Oil Shares in issue at the date of this announcement). Once this acceptance threshold has been reached, ENOC intends to procure the de-listing of the Dragon Oil Shares from the Irish Stock Exchange and the London Stock Exchange.
· The Offer provides an attractive opportunity for Dragon Oil Shareholders to realise their investment, at a significant premium and in cash. The Offer represents a premium of approximately:
· 47.2 per cent to the Closing Price of 509.5 pence per Dragon Oil Share on 13 March 2015 (being the business day immediately before the date of the first approach by ENOC);
· 40.9 per cent to the volume weighted average Dragon Oil Share price of 532.5 pence over the 90 day period ended 13 March 2015; and
· on a cash adjusted basis, 93.3 per cent referencing the Closing Price of 509.5 pence per Dragon Oil Share on 13 March 2015.
· The Offer represents a substantial increase to the initial proposal put forward to the Independent Committee on 15 March 2015.
· The Offer will be fully financed from ENOC's existing cash resources and has no pre-conditions.
· The Offer Document, containing further information about the Offer, will be published, other than with the consent of the Panel, within 28 days of this announcement and will be made available at www.dragonoiloffer.com and also at www.dragonoil.com/investors.
· Commenting on the Offer on behalf of ENOC, Saif Al Falasi, Group Chief Executive said:
"Following our announcement on 21st May, outlining a possible cash offer for Dragon Oil, we met with a number of shareholders in order to give them the opportunity to provide feedback. As a direct result of these discussions, we decided to further improve our Offer to 750 pence per share, which the Independent Committee at Dragon Oil has recommended.
As a long term and supportive shareholder, we appreciate Dragon Oil's achievements to date. We believe that Dragon Oil has now achieved as much as is possible through its existing upstream strategy. Moreover, with production close to plateau at its sole producing asset and with an uncertain market backdrop, this Offer provides Dragon Oil's minority shareholders certainty and a clear opportunity to realise significant cash today.
ENOC's Board and I have great respect for the Board and management of Dragon Oil and we look forward to working with them and the Independent Committee on successfully completing this recommended Offer."
· Commenting on the Offer on behalf of the Independent Committee, Thor Haugnaess, Chairman of the Independent Committee said:
"The Independent Committee believes that ENOC's cash offer, which is the result of extensive negotiations between the Independent Committee and ENOC, reflects the achievements and future prospects of the Dragon Oil Group and offers Dragon Oil minority shareholders an opportunity to exit at an attractive price."
About ENOC
ENOC is a diversified energy group, operating over 30 active subsidiaries and joint ventures, with activities ranging from refining and marketing, oil trading, gas processing, terminalling and storage services, oil related shipping activities, LPG - fuel distribution, marketing of aviation fuel, lubricants and chemicals, bunkering, retailing (approximately 115 retail service stations serving in excess of 70 million customers annually), and oil and gas exploration and production (through ENOC's 53.9 per cent. ownership of the existing issued share capital of Dragon Oil).
ENOC has over 6,500 employees and achieved a turnover of approximately US$20.9 billion in 2014. ENOC is effectively wholly-owned by the Investment Corporation of Dubai, which is itself wholly-owned by the Government of Dubai.
ENOC has taken the strategic decision to become a fully integrated global oil and gas company and is looking to further diversify its sources of cash flow by operationally consolidating its upstream footprint. The combination of ENOC's existing downstream and midstream positions and skillset with Dragon Oil's upstream operating experience represents a key step towards creating an international integrated oil and gas company.
About Dragon Oil
Dragon Oil is an independent oil and gas exploration and production company, registered in Ireland with company registration number 35228. It has a primary listing on the Irish Stock Exchange and its shares are traded on the premium segment of the Main Market of the London Stock Exchange. It has its headquarters in Dubai. Approximately 53.9 per cent of the existing issued share capital of Dragon Oil is currently held by ENOC.
Dragon Oil's principal producing asset is a 100 per cent operated interest in a Production Sharing Agreement ("PSA") for the exploration, development and production of oil and gas resources in the Cheleken contract area in the eastern section of the Caspian Sea, offshore Turkmenistan. The area comprises two oil and gas fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov). The PSA has an initial term of 25 years and will expire in May 2025. Dragon Oil has an exclusive right during the term to negotiate for an extension of the PSA for a further period of not less than 10 years. As of 31 December 2014, the Cheleken contract area held remaining gross proven and probable reserves of 663 million barrels of oil and condensate and 1.3 TCF of gas.
In addition, over the past four years, the Dragon Oil Group has diversified its asset base through exploration blocks in Iraq (Block 9), Algeria (Tinrhert Nord Perimeter and Msari Akabli Perimeter), Egypt (East Zeit Bay), Afghanistan (Sanduqli and Mazar-i-Sharif blocks), Tunisia (the Bargou Exploration Permit) and the Philippines (Service Contract 63). Current anticipated exploration expenditure is approximately US$ 50 million to 100 million per annum in 2015 and 2016.
Additional information is available at www.dragonoiloffer.com and also at www.dragonoil.com/investors, including a copy of this announcement and frequently asked questions. Pursuant to Rule 2.6(c) of the Irish Takeover Rules, this announcement will be available to ENOC employees on ENOC's intranet,http://myenoc/default.aspx and will also be made available to Dragon Oil employees.
This summary should be read in conjunction with the full text of the attached announcement and appendices. The Offer is subject to the Conditions set out in Appendix 1 to this announcement and the further terms to be set out in the Offer Document and the Form of Acceptance. The sources and basis of information contained in this announcement are set out in Appendix 2. Certain expressions used in this announcement are defined in Appendix 3.
Barclays is acting as financial adviser, Arthur Cox is acting as legal adviser in Ireland and Freshfields Bruckhaus Deringer LLP is acting as legal adviser in relation to English law matters to ENOC.
Nomura and Davy are acting as joint financial advisers, Mason Hayes & Curran is acting as legal adviser in Ireland and Allen & Overy LLP is acting as legal adviser in relation to English law matters to Dragon Oil.
Enquiries:
Statements Required by the Irish Takeover Rules
The directors of Dragon Oil accept responsibility for the information contained in this announcement relating to Dragon Oil, the Dragon Oil Group, the directors of Dragon Oil and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the directors of Dragon Oil (who have taken all reasonable care to ensure such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
The members of the Independent Committee accept responsibility for the recommendation of the Acquisition and associated opinions contained in this announcement. To the best of the knowledge and belief of the members of the Independent Committee (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
The directors of ENOC accept responsibility for the information contained in this announcement, other than that relating to Dragon Oil, the Dragon Oil Group, the directors of Dragon Oil and members of their immediate families, related trusts and persons connected with them and the recommendation and related opinions of the Independent Committee contained herein. To the best of the knowledge and belief of the directors of ENOC (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
Barclays, which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for ENOC and for no-one else in connection with the matters set out in this announcement and will not be responsible to anyone other than ENOC for providing the protections afforded to clients of Barclays nor for providing advice in connection with the matters set out in this announcement.
Nomura, which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and Prudential Regulation Authority, is acting exclusively for the Independent Committee and no one else in connection with this announcement and will not be responsible to anyone other than the Independent Committee for providing the protections afforded to clients of Nomura nor for providing advice in connection with this announcement or any matter referred to herein.
Davy, which is authorised and regulated by the Central Bank of Ireland, is acting exclusively for the Independent Committee and no one else in connection with this announcement and will not be responsible to anyone other than the Independent Committee for providing the protections afforded to clients of Davy nor for providing advice in connection with this announcement or any matter referred to herein.
Rule 8 Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Irish Takeover Rules, if any person is, or becomes, 'interested' (directly or indirectly) in 1 per cent. or more of any class of 'relevant securities' of Dragon Oil, all 'dealings' in any 'relevant securities' of Dragon Oil (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by not later than 3:30 pm (Irish time) on the 'business day' following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes effective or on which the 'offer period' otherwise ends. If two or more persons co-operate on the basis of any agreement, either express or tacit, either oral or written, to acquire an 'interest' in 'relevant securities' of Dragon Oil, they will be deemed to be a single person for the purpose of Rule 8.3 of the Irish Takeover Rules.
Under the provisions of Rule 8.1 of the Irish Takeover Rules, all 'dealings' in 'relevant securities' of Dragon Oil by ENOC, or by any party Acting in Concert with either of them, must also be disclosed by no later than 12 noon (Irish time) on the 'business day' following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, can be found on the Panel's website at www.irishtakeoverpanel.ie.
'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Irish Takeover Rules, which can be found on the Panel's website. If you are in any doubt as to whether you are required to disclose a dealing under Rule 8, please consult the Panel's website at www.irishtakeoverpanel.ie or contact the Panel on telephone number +353 1 678 9020 or fax number +353 1 678 9289.
No Offer or Solicitation
This announcement is for information purposes only and is not intended to, and does not, constitute an offer to purchase, sell, subscribe for or exchange, or the solicitation of an offer to purchase, sell, subscribe for or exchange or an invitation to purchase, sell, subscribe for or exchange any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the offer or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.
Notice to US Holders of Dragon Oil Shares:
The Offer is being made for the securities of an Irish company and is subject to Irish disclosure requirements, which are different from those of the United States. The financial information included in this announcement, if any, has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. The Offer will be made in the United States pursuant to the applicable US tender offer rules and otherwise in accordance with the requirements of the Irish Takeover Rules. Accordingly, the 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.
The receipt of cash pursuant to the Offer by a US holder of Dragon Oil Shares may be a taxable transaction for US federal income tax purposes and under applicable state and local, as well as foreign and other tax laws. Each holder of Dragon Oil Shares is urged to consult his independent professional advisor immediately regarding the tax consequences of acceptance of the Offer.
It may be difficult for US holders of Dragon Oil Shares to enforce their rights and claims arising out of the US federal securities laws, since ENOC and Dragon Oil 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 of Dragon Oil Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.
In accordance with normal Irish practice and pursuant to Rule 14e-5(b) of the US Exchange Act, ENOC or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Dragon Oil Shares outside of the United States, other than pursuant to the Offer, before or during the period in which the Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in Ireland by a RIS announcement and will be available on the Irish Stock Exchange's website at www.ise.ie.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements included in this announcement are forward-looking and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
Forward-looking statements can typically be identified by the use of forward-looking terminology, such as "expects", "may", "will", "could", "should", "intends", "plans", "predicts", "envisages" or "anticipates" and include, without limitation, any projections relating to results of operations and financial conditions of ENOC and its subsidiary undertakings from time to time or, as the case may be, Dragon Oil and its subsidiaries from time to time, as well as plans and objectives for future operations, expected future revenues, financing plans, expected expenditures and divestments relating to the ENOC Group or, as the case may be, the Dragon Oil Group and discussions of the ENOC Group's business plan or the Dragon Oil Group's business plan. All forward-looking statements in this announcement are based upon information known to the ENOC Group and, as the case may be, the Dragon Oil Group on the date of this announcement in relation to the ENOC Group or the Dragon Oil Group. Neither the ENOC Group nor the Dragon Oil Group undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, save as may be required by law. You are cautioned not to place undue reliance on any forward-looking statements.
It is not reasonably possible to itemise all of the many factors and specific events that could cause the forward-looking statements in this announcement to be incorrect or that could otherwise have a material adverse effect on the future operations or results.
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an exact arithmetic aggregation of the figures that precede them.
No Profit Forecast / Asset Valuations
No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or less than those for the relevant preceding financial periods for Dragon Oil or ENOC as appropriate. No statement in this announcement constitutes an asset valuation.
General
The Offer will not be made, directly or indirectly, in or into any jurisdiction where it would be unlawful to do so, or by use of mail, or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or by any facility of a national securities exchange of any jurisdiction where it would be unlawful to do so, and the Offer will not be capable of acceptance by any such mail, means, instrumentality or facility from or within any jurisdiction where it would be unlawful to do so. The release, publication or distribution of this announcement in or into certain jurisdictions may be restricted by the laws of those jurisdictions. Accordingly, copies of this announcement and all other documents relating to the Offer are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in, into or from any such jurisdiction. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to observe such restrictions and/or requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies involved in the Offer disclaim any responsibility or liability for the violations of any such restrictions by any person. This announcement has been prepared for the purposes of complying with Irish and English law (as applicable), the Irish Takeover Rules, the Listing Rules and the rules of the Irish and London Stock Exchanges 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 of Ireland.
Notwithstanding the foregoing restrictions, ENOC reserves the right to permit the Offer to be accepted if, in its sole discretion, it is satisfied that the transaction in question is exempt from or not subject to the legislation or regulation giving rise to the restrictions in question.
This announcement does not constitute a prospectus or an equivalent document and it is not intended to and does not constitute or form any part of an offer or invitation to sell or purchase or subscribe for any securities or a solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely by means of the Offer Document which will contain the full terms and conditions of the Offer. Any response in relation to the Offer should be made only on the basis of the information contained in the Offer Document or any other document by which the Offer is made. Dragon Oil Shareholders are advised to read carefully the formal documentation in relation to the Offer once the Offer Document has been despatched.
The content of the websites referred to in this announcement are not incorporated into and do not form part of this announcement.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.