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It look like this whole deal is about letting the Arabs into the North Sea on the cheap.
75% of shareholders need to approve the deal and then shares would stop trading in August 2020. £18.50 is a fking insult !!
Newk, entirely plausible. If you enjoy what you do in the energy sector and have created a great business, is there any upside of being public? Getting bashed of ESG ideologues, a smaller universe of public investors, ever-growing regulatory costs and disclosure requirements every time you sneeze.
The facts are, being private in the energy (fossil fuels) sector is become more advantageous. Its a shame because i have a feeling AA as stuck is fingers up at the public markets at the wrong time. The fickleness of the ESG ideologues sat in London's institutional invest seats is likely to be exposed in the coming years. FANG/software/services is by chance flavour of the month and coincidentally overvalued to the extent multiples are in bubble territory. When this bursts, free cash flows from solid energy producers and great operators will have massive relative value.
In summary, is it a headache being public now as a producer of hydrocarbons....yes. Will it always be like this....no, imo.
THIS WHOLE DEAL STINKS !! READING THE BELOW TEXT MAKES ME THINK AA IS FULL OF CR@P.
However, in the opinion of the RockRose Directors, the market capitalisation of RockRose has consistently been unreflective of business performance and future opportunities and, hence, even if the acquisition strategy were to continue to be implemented, the RockRose Directors would be unlikely to access the equity markets for any required finance.
unrestricted cash balances at the same date amounted to US$ 289.8 million, equivalent to approximately 1,789 pence per RockRose Share, compared to the Closing Price per RockRose Share on the London Stock Exchange's Main Market for listed securities as at 3 July 2020 of 1,130 pence. The recent oil price collapse and the impact of COVID-19 has seen RockRose's share price suffer a significant decline (although not perhaps as severe as certain members of its peer group), however the fundamentals of the business remain solid. RockRose was explicitly established to function in a low oil price environment of below US$ 50 per barrel and has stated that its operating cost per barrel on an oil equivalent basis is below US$ 30.
The RockRose Directors remain confident that RockRose has the ability to weather the current market conditions and emerge in a position to make further accretive acquisitions. However, in the opinion of the RockRose Directors, the market capitalisation of RockRose has consistently been unreflective of business performance and future opportunities and, hence, even if the acquisition strategy were to continue to be implemented, the RockRose Directors would be unlikely to access the equity markets for any required finance. Accordingly, the RockRose Board believes that, given the costs of remaining a public company, it would be in the best interests of RockRose and its stakeholders to be part of a private group where the strategy can be pursued by a single owner and for current RockRose Shareholders to have an attractive exit opportunity.
"Or private equity has committed to back a new vehicle with him at the helm..."
Hows this for out of the box option... SQZ, get his hands on it one way or another. With PE backing could get SQZ for net of circa £290m
a £250,000,000 bridge term facility agreement with its parent company, Viaro, as guarantor and H.H. Shaikh Thiab Bin Khalifa Al Nehayan as original lender.
"RockRose has a strong balance sheet, with no debt and cash at the close of business on 25th March 2020 of £287 million (£248 million unrestricted), equivalent to £21.89 per share. "
So this deal values the assets at less than zero.
Makes perfect sense!
....Or private equity has committed to back a new vehicle with him at the helm. With his cash from RRE, he will have skin the game and an ability to negotiate good terms.
Maverick,
"If AA once he completes this sale, is immediately in the market to set up a new company with assets he had earmarked for RRE..."
Agree, AA has done well to get rid of the millstone around his neck of what he probably now considers a mistake with MO.
Start again, then launch an IPO with his new company, probably this year imo.
Just a question & perhaps naive ones:
If the code is an "offer to all other shareholders at the highest price paid in the 12 months before the offer was announced".
Why isn't the high of 22.50 on 15 Jan 20 or 19.95 30 Sep 19 in consideration? Is that to do with concert party dealings?
What is against holding to see how this pans out? Would that be risking getting locked in until the deal was completed?
Thanks, its been a good day so far IMO but if it went higher, all the better
Bit disappointed with this but still made money so can't complain too much.
Maybe AA will take his millions and start again from scratch, like the Faroe team have done with Longboat.
HUR repeat of here guys that's where i would be heading now well done here
If AA once he completes this sale, is immediately in the market to set up a new company with assets he had earmarked for RRE.
£3.90 per barrel of reserves and £270m cash for free. AA deffo needs to publicly explain this one !
If this deal is the new benchmark for NS assets then there are some very overpriced companies out there. Using this metric what does that value SQZ et al at ??
Well I have made a slight profit after dividends received. Very disapointed we have been sold out on the cheap, I had high hopes for this one. Just a pity I didnt have the funds to buy a wad when they went down to £5. Well done to this who had the balls & made a packet. Onwards & upwards.
I think AA needs to do an interview with Malcy and explain why he has changed from $billion dollar expansion, £50/sh, boasts about cash held by the Co then sell out at £18.50. If as he puts it RRE are the best investment in the North Sea what the fk is he playing at?!?!?!
Didn't see that coming!
I'd set up for a mid term haul on the back of the oil price, so I'm not displeased with the gains coming earlier than expected. The decision now is how much of my profits to put into IOG, my other North Sea holding.
It isn't 100% in the bag. Let's just wait and see what unfolds.
Like most others I feel £18.50 is a sell out. I would have thought £25/sh at least seeing as we were at £22 in Jan this year. Everything happens for a reason, onto the next one. I'll miss RRE ant that dream of £50/sh. I am in mourning ...;o(((
Cannot believe they sold out for this little. There was so much upside left to this business. I can't blame them though, after they saw the drop in the sp I imagine they just wanted to get out as quickly as they could.
Has to be SQZ all day long imo.
Trading pattern there has been something to admire.
Whole thing is disappointing
Very similar to when KNOC bought out DANA for 2 X earnings.
Share price was £18.00.
Ah well, onto the next.
Longboat seems to be popular, but I am wary of a big rights issue/cashraise.
That happened before the repeat of £50 per share and that was the catalyst for AA to say they had a billion in funding and were looking for acquisitions! Sale price less than cash and therefore values assets at less than nothing so very strange deal and a stitch up