LONDON (ShareCast) - (Sharecast News) - Riverstone Energy announced a tender offer for up to £55m in value of the company's ordinary shares on Monday, to be acquired at a single strike price in a range between £12.00 and £13.75 per share, to be determined on the basis of tenders received.
The FTSE 250 company's board said it arranged for the tender offer to be made to enable those eligible shareholders who wished to realise a portion of their investment in the company to do so, while also ensuring that continuing shareholders who did not wish to tender their shares were not disadvantaged, as the tender offer was expected to be accretive to its prevailing published net asset value at the point of completion of the Tender Offer.

It said the offer would be available to eligible shareholders on the register at 1800 GMT on 14 November.

"Since its IPO in October 2013, the company has performed well, with a share price of £12.52 as at close of business on 12 October, which is 25.2% higher than the IPO price of £10.00 per share and 56.5 per cent higher than the December 2015 issue price of £8.00 per share," the Riverstone board noted in its statement.

"Over the same respective periods, the S&P Oil & Gas E&P Index is down approximately 43.3% and up approximately 23.2%.

"In addition, since the time of IPO, the company has achieved, as at 30 September, a gross multiple of invested capital - before the application of fees and taxes - of 2.1x on the investments in which it has fully exited, and has achieved $431m of gross realisations."

Riverstone said that performance had been achieved in the backdrop of a volatile period for oil prices and a prolonged downturn in natural gas prices.

"Further to the announcement on 18 September in respect of the Hammerhead Resources capital raise, the company confirms that, for portfolio diversification reasons, it will not be participating in the capital raise," the board added.

The capital raise was not expected to have a material impact on Riverstone's 30 September valuation of Hammerhead Resources.

Riverstone said it would announce its net asset value per share as at 30 September on 31 October.

"Recognising the current liquidity for shares in the market, the board is providing an opportunity for all eligible shareholders on the record date to participate in the tender offer to exit part of their shareholding in the company.

"Furthermore, the recent strength in oil prices, driven by increased concerns regarding availability of supply, provides an attractive environment for the company's investment manager to generate value from its current portfolio."

The company said it intended to deploy the remainder of its cash balance following completion of the tender offer towards "attractive opportunities" within the existing portfolio and one or more new energy investments which the investment manager was currently progressing.

"The company's investment manager remains focused on delivering attractive risk-adjusted returns to shareholders by leveraging the investment manager's extensive platform and deep sector expertise, partnering with best-in class management teams and prudent risk management."

Riverstone said it would finance the tender offer from its existing cash balances.

Following completion of the offer in mid-November, assuming the offer was accepted in full, the company's residual cash balances were expected to total $140m

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