The Directors of each of Granby and Silverstone are pleased to announce that they have reached agreement on the terms of a recommended cash offer of 63.45 pence per Granby Share to be made by Silverstone to acquire the entire issued and to be issued share capital of Granby that is not already owned by Silverstone.
The Offer will be made on the following basis:
for each Granby Share 63.45 pence in cash.
- The Offer Price represents a premium of approximately 30.8 per cent. to Granby’s share price of 48.5 pence at the close of business on 17 March 2008, being the last Business Day prior to this announcement.
- The terms of the Offer value Granby’s existing issued share capital at approximately £23.1 million.
- Silverstone has received irrevocable undertakings to accept (or procure the acceptance of) the Offer in respect of a total of 15,347,540 Granby Shares representing, in aggregate, approximately 42.2 per cent. of the existing issued share capital of Granby, comprised as follows:
(a) from each of the Granby Directors and/or certain of their connected persons in respect of Granby Shares held by them and, in certain cases, by their connected persons, and certain other Granby Shareholders in respect of their entire beneficial holdings which amount, in aggregate, to 12,331,350 Granby Shares, representing approximately 33.9 per cent. of the existing issued share capital of Granby. These undertakings will continue to be binding even if a competing offer is made for Granby which exceeds the value of the Offer and even if such higher offer is recommended for acceptance by the Board of Granby; and
(b) from certain other Granby Shareholders in respect of, in aggregate, 3,016,190 Granby Shares, representing approximately 8.3 per cent. of the existing issued share capital of Granby. These undertakings will continue to be binding even if a competing offer is made for Granby unless such competing offer represents an improvement of not less than 10 per cent. on the value of the Offer.
- All of the irrevocable undertakings referred to above will lapse if the Offer lapses or is withdrawn.
- The Directors of Granby, who have been so advised by Granby’s advisers Tristone Capital and KBC Peel Hunt, consider that the terms of the Offer are fair and reasonable. In providing their advice, Tristone Capital and KBC Peel Hunt have taken into account the commercial assessments of the Directors.
- Accordingly, the Directors of Granby intend to recommend that Granby Shareholders accept the Offer, as those Directors and/or their connected persons, who hold Granby Shares, have irrevocably undertaken to do in respect of their beneficial shareholdings or procure to be done in respect of Granby Shares held by their connected persons amounting, in aggregate, to 5,703,304 Granby Shares, representing 15.7 per cent. of the existing issued share capital of Granby.
Commenting on the proposed Offer, Matt Brister, Chief Executive Officer of Silverstone said:
“We recognise real similarities and alignment between the Silverstone and Granby assets in terms of our project overlap, exploration focus and near term first production. We are both early stage exploration focused North Sea stories and we feel an expanded asset base, including first gas from Tristan NW and our Victoria development, will provide a strong platform to test our expanded prospect inventory and lead to enhanced value delivery to our shareholders.”
Ric Piper, Chairman of Granby, said:
“Since Granby was admitted to trading on AIM in 2005, the upstream environment has experienced increasingly high costs, whilst high oil and gas prices have made competition for attractive exploration, appraisal and development projects more intense, and suitable producing assets are only rarely available for acquisition. The Directors of Granby believe that to maintain a sufficient level of activity to create material growth in value in a reasonable timeframe is likely to require a significant increase in overall scale and available capital resources, which would probably result in significant dilution of potential returns for all Granby Shareholders. The Directors of Granby believe that this Offer is in the best interests of Granby Shareholders and, accordingly, they intend unanimously to recommend that Granby Shareholders accept the Offer.”
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