Bridge Energy ASA , the Oslo Børs and AIM listed oil and gas exploration and production company has noted the announcement today by Spike Exploration Holding AS (“Spike Exploration”) that it will launch an offer to acquire the entire issued share capital of Bridge through a voluntary cash tender offer of NOK 15.25 per Bridge share (the “Offer”), equivalent to approximately 162 pence per Bridge share. Spike Exploration has also confirmed to the Board of Directors of Bridge that a proposal on equivalent terms to the Offer will be made to the holders of options in Bridge 2013 subject to, and immediately after, settlement of the Offer.
The Offer values the entire issued share capital of Bridge at approximately NOK 967 million (equivalent to approximately £103 million). The Offer represents a premium of approximately 41 per cent. to both the closing share price of Bridge on 13 September 2013, the last trading day prior to the announcement of the Offer, and the volume weighted average share price of Bridge for the three month period ending on 13 September 2013.
Prior to announcing the Offer, Spike Exploration has discussed its proposal with Bridge and certain of the largest shareholders of Bridge. Shareholders representing c.62 per cent. of the total issued shares and votes of Bridge have pre-accepted the Offer. Of such total, shareholders representing c.34 per cent. of the total issued shares and votes of Bridge have granted irrevocable pre-acceptances of the Offer.
Bridge was established in 2010 as a growth business focussed on both the UK and Norway, with a strategy to expand both production and resources through a balanced programme of acquisition, exploration and development, using its existing portfolio as a foundation. Bridge currently has four producing assets which contribute c.1,100 barrels of oil equivalent per day (“boepd”), with production from the existing asset portfolio projected to exceed 10,000 boepd within five years. This core production has been augmented with a successful high-impact exploration programme, which in Q4 2012 saw the Company drill four exploration wells, yielding three commercial oil discoveries and culminating in the Company being awarded with the title of NCS Explorer of the Year 2012. Overall, the 2012 drilling programme added approximately 22 million barrels of oil equivalent 2C contingent resource, increasing the Company’s overall resource base by c.140 per cent..
Bridge has informed that its Board of Directors believes that, in order to further and fully develop the Company’s asset base and unlock the value of its reserves and resources, the Company is likely to require to raise further capital either from the equity markets or from industry partners resulting in the dilution of its equity base or its interests in the assets and, potentially, any ultimate return to Bridge’s shareholders. Accordingly, over recent months, the Company and its advisers have conducted a thorough and extensive strategic review process to determine how value might be best delivered for shareholders.
Board likes the offer
Based on the findings of that review process and the level of pre-acceptances and irrevocable undertakings in respect of the Offer secured by Spike Exploration from certain of the Company’s significant shareholders, the Board of Directors believes that the terms and conditions of the Offer presented to Bridge are compelling and has decided to unanimously recommend that shareholders accept the Offer.
Commenting on the Offer, Tom Reynolds, Chief Executive Officer of Bridge said: “We are pleased to announce that Bridge has received a cash offer from Spike Exploration. The Board decided to recommend this offer as it reflects a fair valuation of our portfolio and a significant premium to the recent trading range. By tendering their pre-acceptances several of our largest shareholders have already recognised that this is the optimal path to realising value without further operational risk and additional funding. It allows us to crystallise the value created within the Company by the Bridge team during and prior to our time as a listed business and will return valuable cash to shareholders”
In particular, the Board of Directors believes that the Offer represents a compelling proposal for shareholders and provides the Company’s shareholders with a cash exit at a substantial premium to the current share price and at a level higher than the Company’s shares have traded at any time since July 2010, immediately following its listing on the Oslo Stock Exchange.
The Offer will be financed by way of available cash resources of Spike Exploration. The complete details of the Offer, including all terms and conditions, will be contained in an offer document (the “Offer Document”) to be sent by Spike Exploration to the shareholders of Bridge in jurisdictions into which the Offer may be extended following review and approval by the Oslo Stock Exchange pursuant to Chapter 6 of the Norwegian Securities Trading Act.
As will be further detailed and specified in the Offer Document, the completion of the Offer will be subject to the following conditions being satisfied or waived by Spike Exploration (acting in its sole discretion): (i) the Offer shall have been accepted by shareholders of Bridge representing more than 90 per cent. of the total outstanding share capital and voting rights of Bridge on a fully diluted basis, (ii) the Board of Directors of Bridge shall not have amended or withdrawn its recommendation of the Offer, (iii) all permits, consents, approvals and clearances required from applicable regulatory authorities having been obtained on conditions satisfactory to Spike Exploration and (iv) other third party approvals deemed reasonably required by Spike Exploration having been obtained.
If Spike Exploration acquires and holds more than 90 per cent. of the total issued share capital of the Company representing more than 90 per cent. of the voting rights in the Company, Spike Exploration intends to carry out a compulsory acquisition of the remaining shares in the Company. Also, if, as a result of the Offer, a subsequent mandatory offer or otherwise, Spike Exploration holds a sufficient majority of the shares in the Company, Spike Exploration intends to propose to the general meeting of the Company that an application is filed with the Oslo Stock Exchange and the London Stock Exchange to de-list the shares of the Company from trading on the Oslo Stock Exchange and AIM respectively.
Cenkos Advises Bridge
Spike Exploration is in the process of preparing the Offer Document. The Offer Document is expected to be sent to Bridge shareholders on or about 30 September 2013 ,subject to approval by the Oslo Stock Exchange, and the Offer is expected to close in October or November, subject to the conditions of the Offer being met or waived.
Cenkos Securities plc is acting as financial advisor for Bridge in connection with the Offer. Advokatfirmaet Thommessen AS (as to Norwegian law) and Pinsent Masons LLP (as to UK law) are acting as legal advisors for Bridge in connection with the Offer.
Cenkos Securities plc, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Bridge and no one else in relation to the matters described in this announcement and will not be responsible to anyone other than Bridge for providing the protections afforded to clients of Cenkos Securities plc nor for giving advice in relation to the Offer or any matter referred to in this announcement. Neither Cenkos nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Cenkos in connection with this announcement, any statement contained herein or otherwise.
Press Release, September 16, 2013