The boards of Edinburgh Oil & Gas plc (“EOG”) and Dyon UK Limited have announced their agreement on the terms of a recommended cash acquisition of EOG by Dyon which is expected to be effected by means of a scheme of arrangement under section 425 of the Companies Act.
Under the terms of the Acquisition, Scheme Shareholders will be entitled to receive 317 pence per Scheme Share in cash. On this basis, the terms of the Acquisition value the entire existing issued ordinary share capital of EOG at approximately £132.8 million.
Dyon is a newly incorporated company, jointly owned by Oranje-Nassau E&P and Dyas UK, formed for the purpose of making the Proposal and the Acquisition. Oranje-Nassau E&P is a wholly owned subsidiary of Oranje-Nassau Groep B.V. and Dyas UK is a wholly owned subsidiary of SHV Holdings N.V.
The terms of the Acquisition represent a premium of approximately 26.8 per cent. to the closing middle-market price of 250 pence per Ordinary Share on 22 April 2005, being the last business day before the Board announced that they had received an approach from
Oranje-Nassau E&P and Dyas UK, and a premium of approximately 52.0 per cent. to the average closing middle-market price per Ordinary Share over the six month period ended 22 April 2005.
Dyon has received from the Directors of EOG and certain institutional Shareholders, irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the EGM in respect of 8,242,516 Ordinary Shares, together representing approximately 19.7 per cent. of EOG’s existing issued ordinary share capital.
In addition, on 28 April 2005, Dyon purchased 2,917,416 Ordinary Shares at a price of 317 pence per Ordinary Share, representing approximately 7.0 per cent. of EOG’s existing issued ordinary share capital.
Dyon has also received from an institutional Shareholder a non-binding letter of intent to vote in favour of the Scheme at the Court Meeting and the EGM in respect of 1,426,450 Ordinary Shares, representing approximately 3.4 per cent. of EOG’s existing issued ordinary share capital.
The Acquisition is conditional on, amongst other things, certain approvals by Scheme Shareholders, and the sanction of the Scheme by the Court. Approval of the Acquisition will be sought from Scheme Shareholders at the Court Meeting and the Extraordinary General Meeting.
The Directors of EOG, who have been so advised by Brewin Dolphin Securities Limited, consider the terms of the Proposal to be fair and reasonable so far as Shareholders are concerned and, accordingly, the Directors unanimously recommend that Scheme Shareholders vote in favour of the Scheme, as they have undertaken to do in respect of their own beneficial holdings of Ordinary Shares.
Commenting on the announcement, René Mulder, Managing Director of Oranje-Nassau, said:
“The takeover of EOG represents an excellent opportunity for us to replace our estimated production for 2005 by more than 200% and EOG’s stake in Buzzard fits very well with our position on the UK Continental Shelf. The acquisition is of an ideal scale for the joint company and the enlarged group will be well placed to take advantage of future opportunities as they arise.
We look forward to working together with the management and staff of EOG.”
Hans Tijssen, Director of Dyas UK, said:
“This joint acquisition provides a welcome opportunity to add another high quality asset to our portfolio in the North Sea, a region that is core to the growth aspirations of the Dyas group. It
represents an exciting prospect to build on EOG’s success with the world class Buzzard discovery.”
Colin H Ross, Chairman of EOG, said:
“The Company’s objectives are to increase its oil and gas reserves and enhance shareholder value and the discovery and development of the Buzzard oilfield has played a key role in achieving these
objectives over the past four years. While the development is progressing well, the proposal from Dyon represents an attractive opportunity for shareholders to realise their investment in the
Company at a price significantly above the level at which the shares have traded in the months prior to our announcement on 25 April 2005.”
