Prax and Hurricane announced on 16 March 2023 that they had reached agreement on the terms of a recommended acquisition of the entire issued and to be issued share capital of Hurricane. A scheme document was published or made available to Hurricane Shareholders on 6 April 2023. Prax provides the following update in respect of the Acquisition.
No Increase Statement
Prax considers the financial terms of the Acquisition to be full and fair. The financial terms of the Acquisition are therefore final and will not be increased, save that Prax reserves the right to revise the financial terms of the Acquisition where: (i) there is an announcement of a firm intention to make an offer for Hurricane by any third party; or (ii) the Panel otherwise provides its consent.
Under Rule 32.2 of the Code, the mix or the composition of the Acquisition, including the Firm Proceeds, the Supplementary Dividend and the Deferred Consideration Units may not be altered in any way.
If, on or prior to the Effective Date, any dividend, distribution, or other return of value, other than the Special Dividends, is declared, made, or paid or becomes payable by Hurricane, Prax will be required to reduce the Cash Consideration payable under the terms of the Acquisition for the Hurricane Shares by an amount equal to the aggregate amount of such dividend, distribution or other return of value.
Under Rule 35.1 of the Code, if the Acquisition lapses, except with the consent of the Panel, Prax will not be able to make an offer for Hurricane for at least 12 months.
Leading Independent Proxy Advisory Firms' Recommendation
Institutional Shareholder Services ('ISS') and Glass, Lewis & Co. ('Glass Lewis') have both issued supportive FOR recommendations, advising their institutional shareholder subscribers to vote IN FAVOUR of the resolutions necessary to approve the Scheme at the Court Meeting and General Meeting.
ISS and Glass Lewis are leading independent, third-party proxy advisory firms which provide proxy voting recommendations to pension funds, investment managers, mutual funds, and other institutional shareholders.
Prax Acquisition Strategy
As disclosed in the Scheme Document, Prax is currently in a number of other acquisition processes to acquire producing oil and gas assets. The current UK oil and gas M&A market is characterised by a limited credible buyer universe and numerous large companies looking to exit their UK positions. Prax has a strong strategic imperative to increase its upstream business, given the synergies that may bring to its downstream business, and Prax's commitment to the Acquisition is in itself significant evidence of its intention to grow its UK upstream business.
Shareholder Support for the Acquisition
As disclosed in the Scheme Document, Prax has received irrevocable undertakings from Crystal Amber and Kerogen to vote, or procure a vote, to approve the Scheme at the Court Meeting and vote, or procure a vote, in favour of the Resolutions at the General Meeting in respect of a total of 894,181,210 Hurricane Shares, representing approximately 44.89 per cent. of the ordinary share capital of Hurricane in issue on the Latest Practicable Date.
As also disclosed in the Scheme Document, Prax has received irrevocable undertakings from each of the Hurricane Directors that hold Hurricane Shares to vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, in respect of a total of 498,092 Hurricane Shares, representing approximately 0.03 per cent. of Hurricane's share capital in issue as at the Latest Practicable Date.
Prax has therefore received irrevocable undertakings to vote, or procure the voting, to approve the Scheme at the Court Meeting and vote, or procure the voting, in favour of the Resolutions at the General Meeting with respect to a total of 894,679,302 Hurricane Shares, representing approximately 44.92 per cent. of the ordinary share capital of Hurricane in issue on the Latest Practicable Date.
Pinsent Masons LLP is providing legal advice to Prax and the Prax Group.
Source: Hurricane Energy / Prax
