Summary
• The boards of OVL and Imperial Energy have reached agreement on the terms of a recommended pre-conditional cash offer, to be made by Bidco, for the entire issued and to be issued ordinary share capital of Imperial Energy (the “Share Offer”).
• The boards of OVL and Imperial Energy have also reached agreement on the terms of a recommended pre-conditional cash offer for the Imperial Energy Convertible Bonds (the “Convertible Bond Offer”, together with the Share Offer, the “Offers”) under which Bidco will offer to acquire the Imperial Energy Convertible Bonds.
• The Offers together value the entire issued and to be issued ordinary share capital of Imperial Energy at approximately £1.4 billion.
• Bidco is a wholly-owned subsidiary of OVL incorporated in Cyprus formed for the purpose of making the Offers. OVL is a wholly-owned subsidiary of Oil and Natural Gas Corporation Limited (“ONGC”), the largest oil and gas exploration and production company in Asia. ONGC is listed on the National Stock Exchange and the Bombay Stock Exchange in India. The primary business of OVL is the exploration and production of oil and gas outside India.
• Imperial Energy is an independent upstream oil exploration and production company focused on the Commonwealth of Independent States and, in particular, the Russian Federation. Imperial Energy is listed on the Official List of the London Stock Exchange.
• Under the terms of the Share Offer, Imperial Energy Shareholders will be entitled to receive 1,250 pence in cash for each Imperial Energy Share held, representing a premium of approximately:
• 61.9 per cent. to 772 pence being the closing mid-market price per Imperial Energy Share on 11 July 2008 (being the last Business Day prior to the announcement that Imperial Energy had received an approach and the commencement of the Offer Period); and
• 36.3 per cent. to approximately 917 pence being the average closing mid-market price per Imperial Energy Share from 6 May 2008 (the day the Imperial Energy Shares commenced trading ex-rights following the rights issue announced by Imperial Energy on 16 April 2008 (the “Rights Issue”)) to 11 July 2008.
• Under the terms of the Convertible Bond Offer, Imperial Energy Convertible Bondholders will be entitled to receive £60,367.53 in cash for each US$100,000 principal amount of the Imperial Energy Convertible Bonds. This reflects the adjusted exchange price of the Imperial Energy Convertible Bonds which applies in the event of a change of control of Imperial Energy.
• The posting of the Offer Document is pre-conditional on certain regulatory clearances being obtained.
• The Imperial Energy Directors, who have been so advised by Merrill Lynch and RBS Hoare Govett, consider the terms of the Offers to be fair and reasonable. In providing their advice, Merrill Lynch and RBS Hoare Govett have taken into account the commercial assessments of the Imperial Energy Directors. Merrill Lynch is acting as the independent financial adviser to Imperial Energy for the purposes of providing independent advice to the Imperial Energy Directors on the Share Offer under Rule 3 of the City Code. Accordingly, the Imperial Energy Directors intend unanimously to recommend that Imperial Energy Shareholders accept the Share Offer as the Imperial Energy Directors (including Peter Levine who holds beneficially 6,268,000 Imperial Energy Shares representing approximately 6.1 per cent. of the existing ordinary share capital of Imperial Energy) have irrevocably undertaken to do in respect of their entire beneficial holdings in Imperial Energy, amounting to, in aggregate, 6,414,734 Imperial Energy Shares, representing approximately 6.3 per cent. of the existing issued ordinary share capital of Imperial Energy.
• Furthermore, the Imperial Energy Directors intend unanimously to recommend that Imperial Energy Convertible Bondholders accept the Convertible Bond Offer.
Commenting on the Offers, Peter Levine, Executive Chairman of Imperial Energy, said:
“Imperial Energy’s Directors are pleased to have been able to reach agreement with OVL and intend unanimously to recommend shareholders accept the proposed offer, which reflects a fair value and marks a premium of 62 per cent. since the day before Imperial Energy first announced it had received an approach.
Imperial Energy has grown significantly from a pure exploration company and as Imperial Energy moves into the next phase of its development, with production increasing further over the coming years, it makes strategic sense to be part of a larger group. The Share Offer fairly reflects Imperial Energy’s achievements and represents an excellent opportunity to realise a compelling value in cash.
I would like to thank all of our investors for their support in allowing us to progress from AIM with a market capitalisation of approximately £2 million in 2004 to a FTSE 250 company with a value, based on the offer, of over £1.4 billion just four years on and becoming one of the most successful E&P companies on the London Stock Exchange.”
Commenting on the Offers, R.S. Butola, Managing Director of OVL, said:
“We are delighted that the Imperial Energy Directors have taken the unanimous decision to recommend our offer. The acquisition represents an important addition to OVL’s operations and we believe OVL’s financial strength and technical expertise will further enhance the attractive growth potential of the business in the Tomsk region. Additionally, we view this as an important opportunity to expand on the continuing co-operation between Russia and India in the energy sector.
We have been impressed with current management’s track record to date and look forward to working closely with Imperial Energy’s employees to develop the business in the future.”