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Cnooc’s $3 Billion UK Portfolio Sale Has Stalled on Valuation Gap .....

"Cnooc Ltd. has paused a planned sale of its UK North Sea portfolio, which could have been valued at as much as $3 billion in a deal, according to people familiar with the matter.... from initial $10 billion sought by the sellers"

https://uk.finance.yahoo.com/news/cnooc-3-billion-uk-portfolio-033359007.html

Yet Serica manage to do a deal that pays a premium to the seller ...

aimo & dyor

NS,

I’m still seeking answers so will continue to ask questions of this deal.

NS,

You once again, avoid / dodge the point in question, you are most proficient !

As for not using rear-view mirror, you are wrong in that too as it helps to see the 'a rse-holes' coming up behind !

aimo & dyor

Longterm support got cut through like butter this morning .. that is no accident but by design.

Still hold that a deal is being worked on and these shorts will turn long in a flash.... insider trading is rife.

"Quintessential Capital Management is a hedge fund manager based in New York. The fund manages a long/short equity hedge fund that invests in a concentrated portfolio of high-quality securities acquired opportunistically when fear or uncertainty creates a sizable gap between price and intrinsic value..."

Under 'normal' circumstances Poppy would of released an RNS this morning stating 'no known reason', but as in closed period her hands are forced.

aimo & dyor

There has been recently a noticeable increase of negative posters on run-up to this morning.... !! Wonder who's payroll they are on !

https://files.cargocollective.com/c1321272/NSV-Energy-Consolidated-Stats-2021---signed.pdf

Poppy, think you need to respond to this market manipulation with a statement asap.

No statement would be they (dark) are in a closed period and shorter's know this ..... deal on horizon imo

aimo & dyor

NS,

So as an expert ( not one of the ill-informed) in all matters relating to locked box and well-read in terms of the circular, I and others would hugely value your estimation of the NET VALUE (£) of this locked box. You offer lots of chat but little substance, now is you time to shine.

aimo & dyor

NS,

"Only the terms of the SPA disclose everything. We will never see that....."

So what you are now saying is that the SPA detail contained within circular, Page 12 Part 4 - 'PRINCIPAL TERMS OF THE ACQUISITION, 4.1 SPA', although items are detailed by Serica, that Serica actually HELD BACK critical and key information regarding the deal from shareholders..... as you quite rightly stated, "it’s about using info we were given." !!
Maybe that's why the BKR circular and admission document contained 539 pages, where as the Tailwind circular managed a grand 23 pages of information for shareholders to digest.

I'm starting to wonder if you have an undeclared interest in this deal above and beyond what you have already stated !!

https://www.serica-energy.com/downloads/reports/Shareholder%20Circular%20-%209%20January%202023.pdf

aimo & dyor

NS,

And you, as an avid supporter of the deal didn't bother to explain this either to backup your views (lol) .... btw, I timed this thread for this weekend having read all company comms inc the circular and posted my intention re : locked box on several occasions. Serica's clarity on this deal is anything but clear imo.

aimo & dyor

Another point is, given date is indeed correct (The locked-box date is 31 December 2021) then this deal MUST have been being worked on pre this date . Which then begs the question, ( putting aside leakage claims) why has it take so long to be announced or were other deals being 'prepared' alongside this and inter-dependent upon each other !

Over 12 months is rather excessive period for what is a relatively straight forward acquisition by Serica of Tailwind.

Something is not right here imo, although I'm no legal eagle !

aimo & dyor

NS,

"I think it’s unlikely to be wrong..."

If so, and the dates within circular pertaining to SPA are correct then Serica will be due as per T&C min circa $100m ( paid out in 2022 dividends) back in cash from Mercuria ( as nominated backer) on completion of deal once Serica file their claim within the required six months.

If there is indeed an 'error' in dates, well that opens a whole can of worms, as per my post afaic.

Which is it is the question !

For me this should be a win win for shareholders.

aimo & dyor

OK Guys' here's an interesting one ....... as promised :

Mitch stated at time of Investor Meeting (10 Jan 2023) that locked box has been in place since signing of SPA.

https://youtu.be/LVcHGIa7ReA?t=4017

Date of signing locked box as detailed in circular as being, "SPA, the sale and purchase agreement entered into between Serica and the Seller on 20 December 2022 ", So far so good !!

https://www.serica-energy.com/downloads/reports/Shareholder%20Circular%20-%209%20January%202023.pdf

Now, here's the interesting thing about what the actual T&C's state regarding our SPA, Locked Box within the circular on Page 16 Part 2 / 1.2 :

" 1.2 Locked-box Transaction Structure and Leakage The Acquisition is structured on a locked-box basis. The locked-box date is 31 December 2021. The Seller has agreed that there is no "leakage" from 1 January 2022 up to Completion. If there has been any leakage between 1 January 2022 and the date of Completion, the Seller will reimburse Serica on a £1 for £1 basis (with no de minimis). As the Seller will not be an entity of any substance following Completion, Mercuria Energy Group Limited has agreed to provide a guarantee and indemnity to Serica to cover any leakage (capped at an amount equal to approximately 40 per cent of the consideration). Serica will have a six month period after Completion to bring leakage claims."

So either I'm interpreting this wrong or there is a glaring error on the dates (years stated) within the circular. If these dates are correct, can Serica claim for all 'leakages' ( which would be substantial imo) from 1 January 2022 up to Completion, note 2022, not as I would of expected, 1 January 2023 !!! Given the apparent 'rush job' of this deal, could I be correct !!

Or would it make the recent vote as per detailed within circular, containing said 'locked box', null and void as a revised circular would need to be issued and so therefore another vote, as per !!

Or better still, Tailwind (aka Mercuria) pull out of the deal as the 'leakage' would not be in their interest. Leakage afaik would include all methods to extract cash from the business (as stated by Mitch), inc dividends which we know from Tailwind's 2021 account was already extensive ($36m), so no reason, given much higher commod prices in 2022 the 'leakage of dividends' would in fact, likely to be much, much higher, est ~$100m

All views welcome.

aimo & dyor

GL,

"Doesn’t stop offers being made which boost the share price.."

Get real man, no one, I mean absolutely no one will ever, ever consider making an offer once this deal has completed, investing time, effort and not to mention cash into approaching Serica when they would know Mercuira WILL have a full BLOCKING VOTE thanks to Mitch et al..

Terry,

Agree ...

"make no mistake Mercuria now control SQZ not the BOD or anyone else now or in the future.... Get ready for more Mercuria deals for SQZ to buy companies which have the cash hollowed out of them replaced by lots of debt.."

The only assumption is that even though you, I and many others (~26%) that voted against, there is a hidden agenda behind this deal as I have posted on previously. One can hope our SP will rise significantly to allow an exit after which, for sure Serica will at some point past 18 month lock up, Merucria, in its own right, will become 100% owner of Serica.

In the meantime, we have 3 NED's joining our board with additional top two Tailwind directors, Steve Edwards and Jacques Tohme 'joining' the mgt team. I say joining, more like, imo, replacing our CFO ( already a given ) and CEO is less time that many here would think with Mercuria's voting power at AGM's. Could well go further and make any of the current board/mgt targets for replacement at anytime too.

You will then have all if not vast majority of hedging be 'arranged' via Mercuira's trading arm with terms overwhelmingly advantageous to Mercuira.

All strategic decisions, ie acquisitions and how to finance these, most likely via debt, will be made by Mercuria alongside their inside men as per our new "strategic relationship" with them and new CFO ! BTW, first deal will be within weeks of completion imo

Buyback will be certain to occur from the off , nothing more than to enhance Mercuria's % holding in Serica at no cost to Mercuira. All helps reduce their acquisition coast come their t/o in >18 months time with weaker SP from which to make a pathetic offer.

Debt will probably be done via one of their subsidiaries / bondholders, once again, nice little earner too.

Then comes dividend, sold as enhancing capital return to us poor shareholders ... of which Mercuira will be the main beneficiary, the object will be to drain as much cash as possible thus ensuring our SP reflects this cash drain ready for T/O.

The sad thing is Serica will become a much larger company for sure, with massive revenue and profits, that through the fault of the 75% 'for' voters will never see the real returns expected passed onto the small guy's, you and I. A path that Serica could have traveled without this awful deal.

aimo & dyor

Mitch did state Serica would have a 'progressive' dividend in his December address regarding Tailwind deal, what that means in real terms, who knows. One would hope given 2022 distribution, 17p/s, then 2023 will be equal too or higher. Until that is announced it's all guess work, as for percentage ( yield) that would depends upon SP at time.

In ACW letter released today, he states, "None of this affects our determination to maintain strong shareholder
returns through both dividends and the potential for capital distribution.."

aimo & dyor

CHAIRMAN'S SCRIPT : SERICA GENERAL MEETING 27 JANUARY 2023

https://www.serica-energy.com/downloads/presentations/Chairmans-2023-GM-statement.pdf

AA (Kistos) made initial approach / contact on 18th May 2022 .... so I would say this 'deal' would have been worked on since before then ..... AA going public made our Board morph into :

https://www.youtube.com/watch?v=WcZe2jJdgcU

Locked Box, that's something for the weekend Sir !

aimo & dyor

JAS,

This deal was, imo known about , wink wink, min 6 months ago and so the price was slowly taken down, one would hope once they have loaded up and closed out any shorts this will start to climb again .... after all wasn't too difficult for someone to gain access to RNS notifiable information with regards to the vote .... I'm sure many would have 'known' about this deal in similar fashion .... good old AIM.

Question remains, how will the SP react on issue of additional 111m shares and at what level will our SP be day prior too !

aimo & dyor

68% of voting rights actually voted .... that's high.

As it happens, the Hardy's vote would have made no difference to the outcome as only 50.01% in favour was required.

Also appears with 48m votes AGAINST there are some serious big hitters not liking this deal .... !!!

Some how, I don't think this will be the end of this saga.

aimo & dyor