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Formal Sale Process for Stake in Offshore Area 1 Block

Source: 1/5/2012, Location: Africa

Cove Energy plc announced on 13 December 2011 that, in line with its stated strategy of value creation through exploration and appraisal it had opened a data room to certain parties who expressed an interest in Cove's 8.5 per cent participating interest in the Mozambique Offshore Area 1 block (Rovuma Area 1 Interest), the gas LNG project which is moving towards the development stage.

Rovuma Area 1 Interest represents a substantial portion of Cove's asset value within the portfolio of focussed and complementary assets which the Company has built in East Africa. As such the Directors have unanimously agreed that a sale of the Company may be appropriate at this time. The Directors have decided to conduct a formal sale process for the entire issued and to be issued share capital of the Company, running alongside other strategic options outlined in the press release on 13 December 2011, including a transaction involving the sale of the Rovuma Area 1 Interest, in line with the Company's stated strategy.

The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement (subject to note 3 to Rule 2.2 of the Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a), for so long as it is participating in the formal sale process. Interested parties should note Rule 21.2 of the Code, which will prohibit any form of inducement fee or other offer-related arrangement, and that the Company has not requested any dispensation from this prohibition under Note 2 of Rule 21.2 at this stage.

The Company is to conduct the formal sale process through its adviser, Standard Chartered Bank, in the following manner. Potential offerors for the entire issued and to be issued share capital of the Company should contact Standard Chartered Bank (contact details as below) without delay. Any interested party will be required to enter into a non-disclosure agreement with the Company on reasonable terms satisfactory to the Board and on the same terms, in all material respects, as the other interested parties, before being permitted to participate in the process. The formal sale process will involve a due diligence phase during which participants will be given access to a data room and management following which interested parties shall be invited to submit their proposals to the Company. The Board shall then discuss certain of these proposals with one or more relevant parties with a view to agreeing an offer with one party which it is able to recommend to shareholders.

The Board reserves the right to alter any aspect of the sale process as outlined above or to terminate it at any time and in such cases will make an announcement as appropriate. The Board reserves the right to reject any approach or terminate discussions with any interested party or participant at any time. There can be no certainty that any offer will be made for the Company, or even proposed, or as to the level of any proposal or offer that may be made. Cenkos Securities plc is also acting for the Company in relation to its role as Nominated Adviser and Broker to the Company.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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