Wentworth Resources plc (“Wentworth”) and Etablissements Maurel & Prom S.A. (“M&P”) are pleased to announce that they have reached agreement on the terms of a recommended acquisition of the entire issued and to be issued share capital of Wentworth by M&P (the “Acquisition”).
Summary
· Under the terms of the Acquisition, which will be subject to the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions which will be set out in the Scheme Document, Wentworth Shareholders will be entitled to receive:
for each Wentworth Share: 32.5 pence in cash
· The Acquisition values the entire issued and to be issued ordinary share capital of Wentworth at approximately £61.7 million. This represents a premium of approximately 30.0 per cent. to the closing price of 25.0 pence per Wentworth Share on 2 December 2022 (being the last Business Day prior to this Announcement)
· Adjusting for Wentworth’s existing cash of approximately US$30.2 million as at 1 November 2022, which was equal to approximately 12.9 pence per Wentworth share, the Acquisition values the business and non-cash net assets of Wentworth1 at approximately £37.1 million. This represents a premium of approximately 62.2 per cent. to the closing price of 25.0 pence per Wentworth Share on 2 December 2022 (being the last Business Day prior to this Announcement) when this closing price is similarly adjusted for cash.
· The Acquisition represents a material increase to the initial indicative offer price proposed by M&P on 23 September 2022.
Background to and reasons for the Acquisition
· Wentworth’s sole non-cash asset is its non-operated 31.94% (direct and indirect) interest in the Mnazi Bay gas asset in Tanzania. As the majority owner and operator of the Mnazi Bay gas asset, M&P is familiar with and has a good understanding of the value of the Mnazi Bay asset and accordingly of Wentworth. As partners in the asset, M&P and Wentworth have an existing relationship which extends over a number of years.
· The Acquisition will provide Wentworth Shareholders with an immediate upfront realisation of value in cash for their Wentworth Shares at a substantial premium to the market price, and an opportunity to realise this value despite the limited liquidity in Wentworth Shares. As M&P is a partner and the operator of the Mnazi Bay asset with existing in-country relationships this is expected to facilitate a timely implementation of the Acquisition and a smooth continuation of operations.
Recommendation and irrevocable undertakings
· The Wentworth Directors, who have been so advised by Stifel as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its financial advice to the Wentworth Directors, Stifel has taken into account the commercial assessments of the Wentworth Directors.
· Accordingly, the Wentworth Directors intend to recommend unanimously that Wentworth Shareholders vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, as the Wentworth Directors have irrevocably undertaken to do in respect of their own holdings of Wentworth Shares, representing approximately 0.26 per cent. of Wentworth’s issued share capital (excluding Treasury Shares) as at 2 December 2022 (being the last Business Day prior to the date of this Announcement).
· In addition, M&P has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting from Wentworth Shareholders holding 39,546,272 Wentworth Shares representing approximately 22.32 per cent. of Wentworth’s issued share capital (excluding Treasury Shares) as at 2 December 2022 (being the last Business Day prior to the date of this Announcement).
Information on M&P
· M&P is an independent oil and gas company, publicly listed on the Euronext Exchange in Paris and focused on exploration and production in Africa and Latin America, with its principal assets in Gabon, Tanzania, Nigeria, Angola and Venezuela. M&P has significant technical and operational experience with over 700 staff globally overseeing M&P’s 171 mmboe of 2P reserves and working interest production of 25,359 boe/d.
General
· If any dividend, distribution or other return of value in respect of the Wentworth Shares is declared, paid, made or becomes payable on or after the date of this Announcement and prior to the Effective Date, M&P reserves the right to reduce the consideration payable for each Wentworth Share under the terms of the Acquisition by the amount per Wentworth Share of such dividend, distribution or other return of value. In such circumstances, Wentworth Shareholders would be entitled to receive and retain any such dividend, distribution or other return of value, which has been declared, made or paid.
· It is intended that the Acquisition be effected by way of a Court-sanctioned scheme of arrangement of Wentworth under Article 125 of the Jersey Companies Law, further details of which are contained in the full text of this Announcement and full details of which will be set out in the Scheme Document. However, M&P reserves the right, with the consent of the Panel, to implement the Acquisition by way of a Takeover Offer.
· The consideration payable under the Acquisition will be funded out of M&P’s existing cash resources.
· The Acquisition will be subject to the Conditions and certain further terms set out in Appendix 1 to this Announcement, including, amongst other things: (i) approval by the requisite majority of Wentworth Shareholders of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, and sanction of the Scheme by the Court; (ii) consent from the Minister responsible for petroleum affairs in Tanzania under the Petroleum Act 2015 and any other applicable laws; (iii) the waiver of any right of first refusal or pre-emption right to which the Tanzania Petroleum Development Corporation (“TPDC”) is entitled in respect of the Mnazi Bay asset; and (iv) approval from the Tanzanian Fair Competition Commission (in the case of (ii), (iii) and (iv) on terms satisfactory to M&P, acting reasonably).
· The Scheme Document will include further details of the Scheme and the Acquisition, together with notices of the Court Meeting and the General Meeting and the expected timetable of the Scheme, and will specify the action to be taken by Wentworth Shareholders. It is expected that the Scheme Document will be sent to Wentworth Shareholders in January 2023. It is expected that the Scheme will become Effective in Q2 2023, subject to the satisfaction or, where applicable, waiver of the Conditions and certain further terms set out in Appendix 1 to this Announcement.
· The Scheme will be governed by Jersey law and will be subject to the jurisdiction of the Court. The Scheme will also be subject to the applicable requirements of the Code and the Panel.
Olivier de Langavant, Chief Executive Officer of M&P said: “As the operator of the Mnazi Bay gas field, increasing our stake through the acquisition of Wentworth is a logical step and reflects our stated strategy of maximising value from existing assets. Mnazi Bay is an important project to M&P and we look forward to ensuring it continues to make a positive impact, helping Tanzania meet its increasing energy demands and enabling local development. We are pleased to have agreed a fair value with Wentworth and will provide further updates on the acquisition process in due course.”
Tim Bushell, Chairman of Wentworth, said: “The Board of Wentworth is pleased to recommend the acquisition by M&P which represents a substantial premium to Wentworth’s prevailing share price and offers an opportunity for our shareholders to realise this value in the near term for cash.
Wentworth has created significant value for shareholders over recent years through share price appreciation alongside substantial capital return from both dividends and share buybacks. Having pursued the Company’s stated strategy of further growth in Tanzania in recent years, the Board believes the offer from M&P delivers immediate value to our shareholders at an opportune time.
M&P is the operator and majority owner of our sole asset, Mnazi Bay, and this is a logical combination that we believe is in the best interests of our shareholders, wider stakeholders and of Tanzania. Wentworth will now work with its in-country stakeholders to assist M&P to achieve the required regulatory approvals in a timely manner and deliver this compelling outcome for our shareholders.”
