Cash offer for Venture Production plc
Cash offer for Venture Production plc
Centrica PLC
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY RESTRICTED JURISDICTION (INCLUDING CANADA AND JAPAN) OR ANY OTHER JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
10 July 2009
Final Cash Offer by
Centrica Resources (UK) Limited (“Centrica Resources†or the “Offerorâ€),
a wholly-owned subsidiary of Centrica plc (“Centricaâ€),
for Venture Production plc (“Ventureâ€)
Summary
- Centrica Resources has today increased its stake in Venture from approximately 23.6 per cent. to approximately 29.0 per cent. by the acquisition from 3i Group plc of its entire 5.4 per cent. stake in Venture.
- Centrica Resources has also today entered into a conditional agreement to acquire all of the Convertible Bonds held or controlled by 3i Group plc.
- Centrica Resources announces the terms of a final cash offer to acquire the entire issued (and to be issued) share capital of Venture not already held by Centrica Resources (the “Offerâ€).
- The Offer will comprise 845 pence in cash for each Venture Share (the “Offer Priceâ€).
- The Offer values Venture's existing issued share capital at approximately £1.3 billion.
- The Offer is final and will not be increased, except that Centrica Resources reserves the right to revise and/or increase the Offer if a competitive situation arises.
- The Offer is conditional upon, amongst other things, Centrica Resources receiving valid acceptances in respect of, or otherwise acquiring, such number of Venture Shares as to give it an interest of over 50 per cent. of the fully diluted ordinary share capital of Venture.
- The Offer Price represents a premium of approximately:
- 45.7 per cent. to the closing price of 580.0 pence for each Venture Share on 17 March 2009, the last trading day prior to commencement of the Offer Period; and
- 87.6 per cent. to the closing price of 450.5 pence for each Venture Share on 13 January 2009, the last trading day prior to market and press speculation about a potential offer for Venture by Centrica.
- Centrica believes that the Offer represents a compelling opportunity for Venture Shareholders to realise the value of their Venture Shares in cash at a significant premium to Venture’s pre-bid speculation share price and at a time of continuing economic uncertainty and market volatility.
- Approximately 70 per cent. of Venture’s reported 2P reserves are natural gas rather than oil. Consequently, the future success and financial performance of Venture as an independent company will depend to a large degree on the future direction of UK gas prices which have demonstrated considerable volatility over the last three years. Over recent months, UK gas prices have fallen significantly and they have not improved as oil prices have done. Since the start of the year, Front Month NBP gas prices have fallen by over 50 per cent. (in pounds sterling terms) whilst Front Month Brent Crude oil prices have risen by approximately 30 per cent. (in US dollar terms) and approximately 16 per cent. (in pounds sterling terms).
- The acquisition of Venture by the Centrica Group is consistent with Centrica’s announced strategy of reducing the Centrica Group’s overall exposure to movements in the wholesale gas price through increased vertical integration. The proposed acquisition of Venture would contribute towards meeting this strategic objective by increasing Centrica’s own production and providing an effective hedge for Centrica’s customer businesses. Centrica’s Board believes that this increased vertical integration will give Centrica a more robust business model, able to perform well in both high and low commodity price environments.
- In contrast, Venture does not have a developed integrated platform. It is directly exposed to low commodity prices with hedging only delaying the impact of that exposure. In addition, a significant portion of Venture’s 2P reserves are not yet in production. As a result, Venture’s future success and financial performance will require significant and sustained investment over the coming years. Venture’s future standalone prospects are therefore likely to depend in part on its ability to raise the funds necessary to develop and bring new projects into production, which in turn will depend on the state of the financial markets at that time. Centrica provides the financial strength, scale and support to reduce the risks associated with the development and commissioning of new projects.
- Centrica believes that the current Venture management and employees are an important part of the successful implementation of its plans for Venture, and intends to build on Venture's highly talented group of employees to support the continued development and expansion of the combined business.
- Commenting on the Offer, Sam Laidlaw, Chief Executive of Centrica, said:
“We are today making what we believe to be an attractive offer to Venture shareholders, providing both a significant premium to Venture's undisturbed share price and certainty now through an all cash offer at a time of continuing weakness in UK gas prices and ongoing economic uncertainty.
This transaction will provide the enlarged group with an enhanced position in the North Sea and a diversified asset portfolio across a number of asset and production areas. Centrica’s backing will provide the financial strength required to develop Venture’s business fully.
We are very pleased to have secured the acquisition of 3i’s stake which demonstrates the support of another one of Venture’s largest shareholders for our bid to buy Venture, and so we are now making the Offer directly to Venture's other shareholders.â€
This summary should be read in conjunction with, and is subject to, the full text of the following announcement (including the Appendices). The Offer will be subject to the Conditions and further terms set out in Appendix 1 of the following announcement and the terms and conditions to be set out in the Offer Documentation when issued. Appendix 2 contains definitions of certain terms used in this summary and the following announcement. Appendix 3 contains the sources and bases of certain information used in this summary and in the following announcement. Please carefully read the Offer Documentation in its entirety before making a decision with respect to the Offer.
Enquiries
Centrica Investor Relations 01753 494 900
Centrica Media Relations 08450 728 001
Julian Metherell Goldman Sachs International 020 7774 1000
Mark Sorrell
Phil Raper
Bob McGuire J.P. Morgan Cazenove 020 7588 2828
Barry Weir
Mark Crossley RBS 020 7678 8000
Andrew Foster
This announcement does not constitute or form part of any offer or invitation to sell or purchase any securities or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, pursuant to the Offer or otherwise. The Offer will be made solely by the Offer Documentation which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Please carefully read the Offer Documentation in its entirety before making a decision with respect to the Offer.
Goldman Sachs International, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Centrica and the Offeror as financial adviser in relation to the Offer and is not acting for or advising any other person and accordingly will not be responsible to any person other than Centrica and the Offeror for providing the protections afforded to the customers of Goldman Sachs International or for providing advice in relation to the contents of this announcement or any offer or arrangements referred to herein or in the Offer Documentation.
J.P. Morgan Cazenove, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Centrica and the Offeror as financial adviser in relation to the Offer and is not acting for or advising any other person and accordingly will not be responsible to any person other than Centrica and the Offeror for providing the protections afforded to the customers of J.P. Morgan Cazenove or for providing advice in relation to the contents of this announcement or any offer or arrangements referred to herein or in the Offer Documentation.
RBS Corporate Finance Limited and RBS Hoare Govett Limited, which are authorised and regulated in the United Kingdom by the Financial Services Authority, are acting for Centrica and the Offeror as financial advisers in relation to the Offer and are not acting for or advising any other person and accordingly will not be responsible to any person other than Centrica and the Offeror for providing the protections afforded to the customers of RBS Corporate Finance Limited and RBS Hoare Govett Limited or for providing advice in relation to the contents of this announcement or any offer or arrangements referred to herein or in the Offer Documentation.
The Offer shall be made solely by the Offeror and neither Goldman Sachs International nor J.P. Morgan Cazenove nor RBS Corporate Finance Limited nor RBS Hoare Govett Limited nor any of their respective affiliates are making the Offer.
The Offer is for the securities of a corporation organised under the laws of Scotland and is subject to the procedure and disclosure requirements of the United Kingdom, which are different from those of the United States. The Offer is being made in the United States pursuant to Section 14(e) of, and Regulation 14E under, the US Securities Exchange Act of 1934, as amended (the “Exchange Actâ€), subject to the exemptions provided by Rule 14d-1(d) under the Exchange Act and otherwise in accordance with the requirements of the Code. Accordingly, the Offer is subject to disclosure and other procedural requirements, including with respect to withdrawal rights, the offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and laws.
It may be difficult for US holders of Venture Shares and other securities to enforce their rights and any claim arising out of the US federal securities laws, since the Offeror and Centrica and Venture are located outside of the United States, and some or all of their officers and directors may be resident outside of the United States. US holders of Venture securities may not be able to sue a foreign company or its officers or directors in a foreign court for violations of the US securities laws. Further, it may be difficult to compel a foreign company and its affiliates to subject themselves to a US court's judgment.
To the extent permitted by applicable law, in accordance with, and to the extent permitted by, the Code and normal UK market practice and Rule 14e-5 under the Exchange Act, the Offeror or its nominees or brokers (acting as agents) or their respective affiliates may from time to time make certain purchases of, or arrangements to purchase, Venture Shares, other than pursuant to the Offer, before or during the period in which the Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Such purchases, or arrangements to purchase, will comply with all applicable UK rules, including the Code and the rules of the London Stock Exchange, and Rule 14e-5 under the Exchange Act to the extent applicable. In addition, in accordance with, and to the extent permitted by, the Code, normal UK market practice and Rule 14e-5 under the Exchange Act, Goldman Sachs International, J.P. Morgan Cazenove, RBS Corporate Finance Limited, RBS Hoare Govett Limited and their respective affiliates will continue to act as exempt principal traders in Venture Shares on the London Stock Exchange and engage in certain other purchasing activities consistent with their respective normal and usual practice and applicable law, including Rule 14e-5 under the Exchange Act. Any information about such purchases will be disclosed on a next day basis to the Panel on Takeovers and Mergers and will be available from any Regulatory Information Service including the Regulatory News Service on the London Stock Exchange website, www.londonstockexchange.com. To the extent that such information is made public in the United Kingdom, this information will also be publicly disclosed in the United States.
The distribution of this document in jurisdictions other than the United Kingdom or the United States may be restricted by the laws of those jurisdictions and therefore persons into whose possession this document comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.
Unless otherwise determined by the Offeror, the Offer is not being, and will not be, made, directly or indirectly, in or into or by the use of the mails of, or by any other means (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facility of a national securities exchange of any Restricted Jurisdiction (as defined herein) and will not be capable of acceptance by any such use, means or facility or from within any such Restricted Jurisdiction. Accordingly, unless otherwise determined by the Offeror, copies of this announcement and any documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send any such documents in or into or from any such Restricted Jurisdiction, as doing so may invalidate any purported acceptance of the Offer. Any person (including, without limitation, custodians, nominees and trustees) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or the Offer Documentation and/or any other related document to any jurisdiction outside the United Kingdom or the United States should inform themselves of, and observe, any applicable legal or regulatory requirements of any relevant jurisdiction. Neither the US Securities and Exchange Commission (the 'SEC') nor any US state securities commission has approved or disapproved this Offer or passed upon the adequacy or completeness of this document or the Offer Documentation. Any representation to the contrary is a criminal offence.
This announcement has been prepared for the purposes of complying with English and Scottish law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England or Scotland.
Forward-Looking Statements
This announcement, including information included in this announcement, contains 'forward-looking statements' concerning Centrica and the Centrica Group and Venture and the Venture Group that are subject to risks and uncertainties. Information in this announcement relating to Venture has been compiled from published sources. Generally, the words 'will', 'may', 'should', 'continue', 'believes', 'expects', 'intends', 'anticipates' or similar expressions identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the Centrica Group's ability to control or estimate precisely, such as future market conditions, changes in regulatory environment and the behaviour of other market participants. Neither Centrica nor the Offeror can give any assurance that such forward-looking statements will prove to have been correct. The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Neither Centrica nor the Offeror undertakes any obligation to update or revise publicly any of the forward-looking statements set out herein, whether as a result of new information, future events or otherwise, except to the extent legally required.
Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of any member of the Centrica Group, the Venture Group or the Enlarged Group following completion of the Offer unless otherwise stated.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, “interested†(directly or indirectly) in 1 per cent. or more of any class of “relevant securities†of Venture, all “dealings†in any “relevant securities†of that company (including by means of an option in respect of, or a derivative referenced to, any such “relevant securitiesâ€) must be publicly disclosed by no later than 3.30 pm on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the “offer period†otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an “interest†in “relevant securities†of Venture, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all “dealings†in “relevant securities†of Venture by Centrica or Venture, or by any of their respective “associatesâ€, must be disclosed by no later than 12.00 noon on the Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose “relevant securities†“dealings†should be disclosed, and the number of such securities in issue, can be found on the Panel’s website at www.thetakeoverpanel.org.uk.
“Interests in securities†arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an “interest†by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel’s website. If you are in any doubt as to whether or not you are required to disclose a “dealing†under Rule 8, you should consult the Panel.
Venture American Depositary Shares
The Offer shall not extend to certain American Depositary Shares (“Venture ADSsâ€) with respect to Venture Shares. In order for holders of Venture ADSs to participate in the Offer, such holders would need first to withdraw their underlying Venture Shares from the relevant depositary facility, by exchanging their Venture ADSs with the relevant depositary for the underlying Venture Shares in time to be able to participate in the Offer.
Publication on Centrica website
A copy of this announcement is and will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Centrica's website at www.centrica.com during the course of the Offer.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY RESTRICTED JURISDICTION (INCLUDING CANADA AND JAPAN) OR ANY OTHER JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
10 July 2009
Final Cash Offer by
Centrica Resources (UK) Limited (“Centrica Resources†or the “Offerorâ€),
a wholly-owned subsidiary of Centrica plc ('Centrica'),
for Venture Production plc (“Ventureâ€)
1. Introduction
Centrica Resources announces the terms of a final cash offer to acquire the entire issued and to be issued share capital of Venture not already owned by it (the “Offerâ€).
On 18 March 2009, Centrica announced that Centrica Resources had acquired a stake of approximately 22.0 per cent. in Venture and was considering its options in relation to Venture, including making a possible cash offer for Venture. Centrica Resources subsequently acquired further Venture Shares to take its stake in Venture to approximately 23.6 per cent. of the issued share capital of Venture.
On 17 June 2009, following a request from Venture, the Panel announced that Centrica must, by 5.00 p.m. on Monday 13 July 2009, either announce a firm intention to make an offer for Venture under Rule 2.5 of the Code or announce that it does not intend to make an offer for Venture.
Centrica Resources has today acquired the entire 5.4 per cent. stake in Venture held by or on behalf of 3i Group plc, thereby increasing its stake in Venture to approximately 29.0 per cent. of the issued share capital of Venture. Centrica Resources has also today entered into a conditional agreement to acquire all of the Convertible Bonds held or controlled by 3i Group plc (as further described in paragraph 14). Having secured the support of 3i Group plc, one of Venture’s largest shareholders, Centrica is today announcing the terms of its Offer directly to all of Venture’s Shareholders.
2. The Offer
The Offer, which is subject to the Conditions and further terms set out below and in Appendix 1, and to be set out in the Offer Documentation when issued, will comprise consideration of
845 pence in cash for each Venture Share.
On this basis, the Offer values Venture's existing issued share capital at approximately
£1.3 billion.
The Offer is final and will not be increased, except that Centrica Resources reserves the right to revise and/or increase the Offer if a competitive situation arises.
The Offer Price represents a premium of approximately:
- 45.7 per cent. to the closing price of 580.0 pence for each Venture Share on 17 March 2009, the last trading day prior to commencement of the Offer Period; and
- 87.6 per cent. to the closing price of 450.5 pence for each Venture Share on 13 January 2009, the last trading day prior to market and press speculation about a potential offer for Venture by Centrica.
Centrica believes that the Offer represents a compelling opportunity for Venture Shareholders to realise the value of their Venture Shares in cash at a significant premium to Venture’s pre-bid speculation share price and at a time of continuing economic uncertainty and market volatility.
Approximately 70 per cent. of Venture’s reported 2P reserves are natural gas rather than oil. Consequently, the future success and financial performance of Venture as an independent company will depend to a large degree on the future direction of UK gas prices.
Over recent months UK gas prices have fallen significantly and they have not improved as oil prices have done. Since the start of the year, Front Month NBP gas prices have fallen by over 50 per cent. (in pounds sterling terms) whilst Front Month Brent Crude oil prices have risen by approximately 30 per cent. (in US dollar terms) and approximately 16 per cent. (in pounds sterling terms). Although gas prices are seasonal, both summer and winter prices have been falling in 2009: for example, the Winter 2009/10 forward NBP gas price has fallen by approximately 30 per cent. since the start of the year.
Front Month NBP Gas Price, Front Month Brent Crude Oil Price
and Winter 2009/10 Forward NBP Gas Price since 2 January 2009
|
[NOTE: THIS GRAPH HAS BEEN REMOVED FROM THE RIS VERSION OF THIS ANNOUNCEMENT FOR TECHNICAL REASONS. THE GRAPH CAN BE VIEWED IN THE .PDF VERSION OF THIS ANNOUNCEMENT AT [NOTE: THIS GRAPH HAS BEEN REMOVED FROM THE RIS VERSION OF THIS ANNOUNCEMENT FOR TECHNICAL REASONS. THE GRAPH CAN BE VIEWED IN THE .PDF VERSION OF THIS ANNOUNCEMENT AT |
Source: IntercontinentalExchange
Notes: Front Month NBP gas prices and Winter 2009/10 forward NBP gas prices in pence per therm. Front Month Brent Crude oil price in US$ rebased to Front Month NBP gas price on 2 January 2009
Additionally, UK wholesale gas prices have demonstrated considerable volatility over the last three years. Uncertainty around the economic environment, the impact of political instability on European gas supplies and the volume of liquefied natural gas (LNG) imports to the UK may lead to continued UK gas price volatility.
Front Month NBP Gas Price since 10 July 2006
|
[NOTE: THIS GRAPH HAS BEEN REMOVED FROM THE RIS VERSION OF THIS ANNOUNCEMENT FOR TECHNICAL REASONS. THE GRAPH CAN BE VIEWED IN THE .PDF VERSION OF THIS ANNOUNCEMENT AT [NOTE: THIS GRAPH HAS BEEN REMOVED FROM THE RIS VERSION OF THIS ANNOUNCEMENT FOR TECHNICAL REASONS. THE GRAPH CAN BE VIEWED IN THE .PDF VERSION OF THIS ANNOUNCEMENT AT |
Source: IntercontinentalExchange
Note: Front Month NBP gas price in pence per therm
In February 2007, Centrica announced a new group strategy which included reducing the Centrica Group’s overall exposure to movements in the wholesale gas price through increased vertical integration. The proposed acquisition of Venture would contribute towards meeting this strategic objective by increasing Centrica’s own production and providing an effective hedge for Centrica’s customer businesses. Centrica’s Board believes that this increased vertical integration will give Centrica a more robust business model, able to perform well in both high and low commodity price environments.
In contrast, Venture does not have a developed integrated platform. It is directly exposed to low commodity prices with hedging only delaying the impact of that exposure. In addition, a significant portion of Venture’s 2P reserves are not yet in production. As a result, Venture’s future success and financial performance will require significant and sustained investment over the coming years. Venture’s future standalone prospects are therefore likely to depend in part on its ability to raise the funds necessary to develop and bring new projects into production, which in turn will depend on the state of the financial markets at that time. Centrica provides the financial strength, scale and support to reduce the risks associated with the development and commissioning of new projects.
3. Centrica's intentions for Venture and Venture's management and employees
Based on the information presently known to it, Centrica intends to continue the businesses of Venture, including supporting Venture's current activities and its continued presence in Scotland.
Centrica believes that the current Venture management and employees are an important part of the successful implementation of its plans for Venture. Centrica intends to build on Venture's highly talented group of employees to support the continued development and expansion of the combined business. If the Offer becomes or is declared unconditional in all respects, Centrica intends that the existing employment rights of all Venture Group employees would continue to be safeguarded in accordance with statutory and contractual requirements.
4. Information on Centrica
The Centrica Group offers a distinctive range of home energy and commercial solutions, including low-carbon products and services, with its primary operations in the UK, North America and Europe. The Centrica Group’s overall business falls into two broad categories – upstream and downstream operations.
The upstream operations generate electricity, produce and store gas and buy and sell energy internationally. The upstream operations primarily consist of Centrica Energy in the UK and Norway, Centrica Storage in the UK and Direct Energy in North America.
The downstream operations supply energy to homes and businesses and provide home and business energy-related services. In the UK, these are delivered by British Gas, through its Residential, Business, Services and New Energy divisions. British Gas supplies gas and electricity for approximately 16.6 million residential and business customers.
In addition to the Centrica Group's core energy and services business in the UK, the Centrica Group has built and acquired businesses in liberalising energy markets where there are good growth opportunities. Currently the Centrica Group operates in North America (in both Canada and the United States) under Direct Energy, where it has a large residential and commercial energy supply business, an energy services business and an upstream business, including a number of operating gas fields in Alberta and a fleet of power generation assets in Texas.
Centrica Group’s European Energy business has operations principally in the Netherlands, Spain, Germany and Belgium.
In 2008, the Centrica Group employed on average 32,817 people, reported operating profit from continuing operations (including joint ventures and associates stated net of interest and taxation, and before exceptional items and certain re-measurements) of £1,942 million and adjusted basic earnings per share of 21.5 pence. For 2008, Centrica paid an ordinary dividend of 12.2 pence per share. During the 2008 financial year, Centrica invested £737 million in power and gas assets to supply the UK market.
In December 2008, Centrica completed a £2,164 million rights issue to fund upstream investments, including a potential acquisition of the interest in Lake Acquisitions Limited, the vehicle through which Électricité de France S.A. (“EDFâ€) acquired British Energy Group plc (“British Energyâ€). On 11 May 2009, Centrica and EDF announced that they had reached a definitive agreement whereby Centrica will invest £2.3 billion for a 20 per cent. interest in Lake Acquisitions Limited and the right to take up an interest of up to 20 per cent. in a joint venture to pursue a planned programme to build four new nuclear power stations in the UK. As part of the agreements with EDF, EDF will acquire Centrica's 51 per cent. stake in Belgian generation and supply business SPE S.A. through the sale of Centrica's indirectly wholly-owned subsidiary Segebel S.A. for €1.3 billion (£1.2 billion). These transactions are inter-conditional and are expected to complete towards the end of the third quarter of 2009 once various necessary regulatory approvals have been received.
5. Information on Venture
Venture is an independent exploration and production company which acquires, develops and brings into production discovered but undeveloped oil and gas fields in the North Sea.
Venture reported revenues of £495 million, production of 45,000 barrels of oil equivalent per day, operating profit of £231 million and profit after tax of £77 million for the financial year ended 31 December 2008.
In the year ended 31 December 2008, Venture had net assets of £424 million and total assets of £1,499 million. In the year ended 31 December 2008, oil accounted for approximately 35 per cent. of the Venture Group's total production and gas approximately 65 per cent., in each case by volume.
6. Financial effects of the acquisition of Venture
As described in paragraph 9 below, the Offer will be financed using a combination of existing cash resources and new debt facilities. The financial impact of the acquisition of Venture Shares pursuant to the Offer will depend on a number of variables, including wholesale gas prices and the number of Venture Shares that are acquired pursuant to the Offer. Based on Centrica’s assumptions, including in relation to gas prices, Centrica estimates that the transaction will be accretive to earnings per share from the first full year after completion. These statements do not constitute a profit forecast and should not be interpreted to mean that the earnings per share in any financial period, or any other financial metrics, will necessarily match or be greater than those for the relevant preceding period.
7. Venture Share Schemes
The Offer will extend to any Venture Shares unconditionally allotted or issued and fully paid whilst the Offer remains open for acceptances pursuant to the exercise of options under any of the Venture Share Schemes or as a result of vesting pursuant to the Venture Share Schemes.
Participants in the Venture Share Schemes will be written to separately and appropriate proposals will be made to such participants in due course. Centrica will take due account of any Venture Share Scheme awards forfeited by an employee under those schemes or plans as a result of the implementation of the Offer when determining the terms of that employee’s future participation in schemes offered at a Centrica level.
8. Conditionality of the Offer
The Offer will be subject to the Conditions and the further terms set out in Appendix 1 and the terms and conditions to be set out in the Offer Documentation when issued.
The Offer will be conditional upon, amongst other things:
- Centrica Resources receiving valid acceptances in respect of, or otherwise holding, such number of Venture Shares so as to give it an interest of over 50 per cent. of the fully diluted ordinary share capital of Venture (or such lower percentage as Centrica Resources may decide, provided that such condition will not be satisfied unless Centrica Resources and/or any other members of the Centrica Group shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, Venture Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at general meetings of Venture). The fully diluted ordinary share capital of Venture comprises:
- all Venture Shares issued and then outstanding;
- the maximum number of Venture Shares issuable upon the conversion of the Convertible Bonds (or such lower number of Venture Shares as Centrica Resources may decide); and
- the maximum number of Venture Shares issuable pursuant to the Venture Share Schemes, whether or not such shares are issued or may become issuable during or after the Offer Period (or such lower number of Venture Shares as Centrica Resources may decide);
- the proposed acquisition of Venture not being referred to a serious doubts investigation under Article 6(1)(c) of Council Regulation (EC) 139/2004 or, if applicable, to the Competition Commission and, where relevant, upon the necessary clearances being granted by the appropriate anti-trust and competition authorities and applicable waiting periods having expired or been terminated under applicable anti-trust and competition laws; and
- the Secretary of State not having indicated an intention to: (i) revoke or recommend the revocation of any exploration or production licence held by a member of the Wider Venture Group; or (ii) require a further change of control of a member of the Wider Venture Group following a change of control of any of them as a result of the implementation of the Offer, and on equivalent indications having been given in respect of such licences issued by the relevant competent authorities in Trinidad and Tobago.
Centrica has taken advice on anti-trust and regulatory matters on the basis of which it believes that no material anti-trust or regulatory issues are likely to arise in relation to the Offer.
9. Financing the Offer
The cash consideration payable by Centrica Resources to Venture Shareholders under the terms of the Offer will be funded from Centrica's existing cash resources and committed debt financing for the Offer (and certain other purposes) to be provided by a number of Centrica's relationship banks, including JPMorgan Chase Bank N.A., The Royal Bank of Scotland plc, BNP Paribas, HSBC Bank plc and Lloyds TSB Bank plc.
Goldman Sachs International, J.P. Morgan Cazenove and RBS Corporate Finance Limited are satisfied that sufficient resources are available to Centrica Resources to satisfy in full the cash consideration payable under the terms of the Offer.
10. Disclosure of interests in Venture
Except for the following:
- 43,400,321 Venture Shares held by Centrica Resources or which Centrica Resources has agreed to acquire; and
- £75,500,000 Convertible Bonds conditionally acquired by Centrica Resources (based on publicly available information, convertible into 8,251,363 Venture Shares),
as at the date of this announcement, neither Centrica Resources, nor any of the directors of Centrica Resources, nor, so far as Centrica Resources is aware, any person acting in concert (within the meaning of the Code) with Centrica Resources owns or controls any Venture Shares or any securities convertible or exchangeable into Venture Shares (including pursuant to any long exposure, whether conditional or absolute, to changes in the prices of securities) or any rights to subscribe for or purchase the same, or holds any options (including traded options) in respect of, or has any option to acquire, any Venture Shares or has entered into any derivatives referenced to Venture Shares (“Relevant Venture Sharesâ€) which remain outstanding, nor does any such person have any arrangement in relation to Relevant Venture Shares. An “arrangement†for these purposes also includes any indemnity or option arrangement, or any agreement or understanding, formal or informal, of whatever nature, relating to Relevant Venture Shares which may be an inducement to deal or refrain from dealing in such securities.
11. Overseas Venture Shareholders
The distribution of this announcement to, and the availability of the Offer to, persons who are not resident in the United Kingdom may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of and observe any applicable legal or regulatory requirements of their jurisdiction. Further details in relation to overseas Venture Shareholders will be contained in the Offer Documentation.
12. Withdrawal rights
Venture Shareholders shall have the ability to withdraw their acceptances only in limited circumstances to the extent permitted by applicable law and the Code, as will be described in more detail in the Offer Documentation.
13. Compulsory acquisition, delisting and cancellation of trading
If Centrica Resources receives acceptances of the Offer in respect of, or otherwise acquires, 90 per cent. or more of the Venture Shares to which the Offer relates (and, therefore, excluding the Venture Shares currently held by Centrica Resources) and assuming all other Conditions of the Offer have been satisfied or waived (if they are capable of being waived), Centrica Resources intends to exercise its rights pursuant to the provisions of sections 979 to 991 (inclusive) of the Companies Act to acquire compulsorily the remaining Venture Shares to which the Offer relates on the same terms as the Offer.
If Centrica Resources receives acceptances of the Offer which would result in Centrica Resources and/or any other members of the Centrica Group holding Venture Shares carrying in aggregate more than 75 per cent. of the total number of Venture Shares, Centrica intends to procure that Venture applies to the UK Listing Authority for the cancellation of listing of Venture Shares on the Daily Official List and to the London Stock Exchange for the cancellation of admission to trading of Venture Shares on its main market for listed securities. Following such cancellation and delisting, Centrica intends to procure that Venture re-registers from a public limited company to a private limited company. Such cancellation, delisting and re-registration will significantly reduce the liquidity and marketability of any Venture Shares not assented to the Offer.
14. Convertible Bonds
Centrica Resources has today entered into a conditional agreement to acquire all of the Convertible Bonds held or controlled by 3i Group plc. The agreement between Centrica Resources and 3i Group plc is conditional on the Panel providing a binding inter partes ruling that the sale and purchase of the Convertible Bonds:
(i) is not prohibited by Rule 16 of the Code or Rule 5 of the Code; and
(ii) does not trigger any obligations under Rule 6.1 of the Code,
and such ruling of the Panel not being successfully challenged or overturned.
If the condition to the sale and purchase of the Convertible Bonds is satisfied, and the sale and purchase completes, Centrica Resources will comply with the requirements of the Code and make an appropriate offer or proposal to the holders of the other Convertible Bonds. Any such offer for the Convertible Bonds would be conditional upon the Offer becoming or being declared unconditional in all respects. Holders of Convertible Bonds currently have the right to exercise their rights to convert their Convertible Bonds into Venture Shares. If this occurs, those holders of Convertible Bonds will be entitled to accept the Offer in respect of the resulting Venture Shares.
The acquisition by Centrica Resources of the Venture Shares held by 3i Group plc is unconditional.
15. General
This announcement does not constitute an offer to purchase or an invitation to sell any Venture Shares and any response to the Offer should be made only on the basis of the information contained in the Offer Documentation.
The Offer Documentation will be posted (other than to Restricted Overseas Persons) as soon as reasonably practicable after, and in any event within 28 days of, the date of this announcement (unless agreed otherwise with the Panel).
The Offer will be governed by English law and will be subject to the jurisdiction of the English courts. The Offer will be subject to the applicable requirements of the Code.
The acquisition of the Venture Shares under the Offer is proposed to be implemented by way of a takeover offer within the meaning of section 974 of the Companies Act but, in the event that the board of Venture recommends the Offer, Centrica Resources may, with the agreement of the board of Venture and the Panel, elect to implement all or any of those acquisitions by way of scheme(s) of arrangement pursuant to Part 26 of the Companies Act.
A copy of this announcement is and will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Centrica's website at www.centrica.com during the course of the Offer.
Appendix 2 contains definitions of certain terms used in this announcement. Details of the sources and bases of certain information set out in this announcement are included in Appendix 3.
Enquiries
Centrica Investor Relations 01753 494 900
Centrica Media Relations 08450 728 001
Julian Metherell Goldman Sachs International 020 7774 1000
Mark Sorrell
Phil Raper
Bob McGuire J.P. Morgan Cazenove 020 7588 2828
Barry Weir
Mark Crossley RBS 020 7678 8000
Andrew Foster
This announcement does not constitute or form part of any offer or invitation to sell or purchase any securities or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, pursuant to the Offer or otherwise. The Offer will be made solely by the Offer Documentation which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Please carefully read the Offer Documentation in its entirety before making a decision with respect to the Offer.
Goldman Sachs International, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Centrica and the Offeror as financial adviser in relation to the Offer and is not acting for or advising any other person and accordingly will not be responsible to any person other than Centrica and the Offeror for providing the protections afforded to the customers of Goldman Sachs International or for providing advice in relation to the contents of this announcement or any offer or arrangements referred to herein or in the Offer Documentation.
J.P. Morgan Cazenove, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Centrica and the Offeror as financial adviser in relation to the Offer and is not acting for or advising any other person and accordingly will not be responsible to any person other than Centrica and the Offeror for providing the protections afforded to the customers of J.P. Morgan Cazenove or for providing advice in relation to the contents of this announcement or any offer or arrangements referred to herein or in the Offer Documentation.
RBS Corporate Finance Limited and RBS Hoare Govett Limited, which are authorised and regulated in the United Kingdom by the Financial Services Authority, are acting for Centrica and the Offeror as financial advisers in relation to the Offer and are not acting for or advising any other person and accordingly will not be responsible to any person other than Centrica and the Offeror for providing the protections afforded to the customers of RBS Corporate Finance Limited and RBS Hoare Govett Limited or for providing advice in relation to the contents of this announcement or any offer or arrangements referred to herein or in the Offer Documentation.
The Offer shall be made solely by the Offeror and neither Goldman Sachs International nor J.P. Morgan Cazenove nor RBS Corporate Finance Limited nor RBS Hoare Govett Limited nor any of their respective affiliates are making the Offer.
The Offer is for the securities of a corporation organised under the laws of Scotland and is subject to the procedure and disclosure requirements of the United Kingdom, which are different from those of the United States. The Offer is being made in the United States pursuant to Section 14(e) of, and Regulation 14E under, the US Securities Exchange Act of 1934, as amended (the “Exchange Actâ€), subject to the exemptions provided by Rule 14d-1(d) under the Exchange Act and otherwise in accordance with the requirements of the Code. Accordingly, the Offer is subject to disclosure and other procedural requirements, including with respect to withdrawal rights, the offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and laws.
It may be difficult for US holders of Venture Shares and other securities to enforce their rights and any claim arising out of the US federal securities laws, since the Offeror and Centrica and Venture are located outside of the United States, and some or all of their officers and directors may be resident outside of the United States. US holders of Venture securities may not be able to sue a foreign company or its officers or directors in a foreign court for violations of the US securities laws. Further, it may be difficult to compel a foreign company and its affiliates to subject themselves to a US court's judgment.
To the extent permitted by applicable law, in accordance with, and to the extent permitted by, the Code and normal UK market practice and Rule 14e-5 under the Exchange Act, the Offeror or its nominees or brokers (acting as agents) or their respective affiliates may from time to time make certain purchases of, or arrangements to purchase, Venture Shares, other than pursuant to the Offer, before or during the period in which the Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Such purchases, or arrangements to purchase, will comply with all applicable UK rules, including the Code and the rules of the London Stock Exchange, and Rule 14e-5 under the Exchange Act to the extent applicable. In addition, in accordance with, and to the extent permitted by, the Code, normal UK market practice and Rule 14e-5 under the Exchange Act, Goldman Sachs International, J.P. Morgan Cazenove, RBS Corporate Finance Limited, RBS Hoare Govett Limited and their respective affiliates will continue to act as exempt principal traders in Venture Shares on the London Stock Exchange and engage in certain other purchasing activities consistent with their respective normal and usual practice and applicable law, including Rule 14e-5 under the Exchange Act. Any information about such purchases will be disclosed on a next day basis to the Panel on Takeovers and Mergers and will be available from any Regulatory Information Service including the Regulatory News Service on the London Stock Exchange website, www.londonstockexchange.com. To the extent that such information is made public in the United Kingdom, this information will also be publicly disclosed in the United States.
The distribution of this document in jurisdictions other than the United Kingdom or the United States may be restricted by the laws of those jurisdictions and therefore persons into whose possession this document comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.
Unless otherwise determined by the Offeror, the Offer is not being, and will not be, made, directly or indirectly, in or into or by the use of the mails of, or by any other means (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facility of a national securities exchange of any Restricted Jurisdiction (as defined herein) and will not be capable of acceptance by any such use, means or facility or from within any such Restricted Jurisdiction. Accordingly, unless otherwise determined by the Offeror, copies of this announcement and any documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send any such documents in or into or from any such Restricted Jurisdiction, as doing so may invalidate any purported acceptance of the Offer. Any person (including, without limitation, custodians, nominees and trustees) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or the Offer Documentation and/or any other related document to any jurisdiction outside the United Kingdom or the United States should inform themselves of, and observe, any applicable legal or regulatory requirements of any relevant jurisdiction. Neither the US Securities and Exchange Commission (the 'SEC') nor any US state securities commission has approved or disapproved this Offer or passed upon the adequacy or completeness of this document or the Offer Documentation. Any representation to the contrary is a criminal offence.
This announcement has been prepared for the purposes of complying with English and Scottish law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England or Scotland.
Forward-Looking Statements
This announcement, including information included in this announcement, contains 'forward-looking statements' concerning Centrica and the Centrica Group and Venture and the Venture Group that are subject to risks and uncertainties. Information in this announcement relating to Venture has been compiled from published sources. Generally, the words 'will', 'may', 'should', 'continue', 'believes', 'expects', 'intends', 'anticipates' or similar expressions identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the Centrica Group's ability to control or estimate precisely, such as future market conditions, changes in regulatory environment and the behaviour of other market participants. Neither Centrica nor the Offeror can give any assurance that such forward-looking statements will prove to have been correct. The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Neither Centrica nor the Offeror undertakes any obligation to update or revise publicly any of the forward-looking statements set out herein, whether as a result of new information, future events or otherwise, except to the extent legally required.
Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of any member of the Centrica Group, the Venture Group or the Enlarged Group following completion of the Offer unless otherwise stated.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, “interested†(directly or indirectly) in 1 per cent. or more of any class of “relevant securities†of Venture, all “dealings†in any “relevant securities†of that company (including by means of an option in respect of, or a derivative referenced to, any such “relevant securitiesâ€) must be publicly disclosed by no later than 3.30 pm on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the “offer period†otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an “interest†in “relevant securities†of Venture, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all “dealings†in “relevant securities†of Venture by Centrica or Venture, or by any of their respective “associatesâ€, must be disclosed by no later than 12.00 noon on the Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose “relevant securities†“dealings†should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel’s website at www.thetakeoverpanel.org.uk.
“Interests in securities†arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an “interest†by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel’s website. If you are in any doubt as to whether or not you are required to disclose a “dealing†under Rule 8, you should consult the Panel.
Venture American Depositary Shares
The Offer shall not extend to certain American Depositary Shares (“Venture ADSsâ€) with respect to Venture Shares. In order for holders of Venture ADSs to participate in the Offer, such holders would need first to withdraw their underlying Venture Shares from the relevant depositary facility, by exchanging their Venture ADSs with the relevant depositary for the underlying Venture Shares in time to be able to participate in the Offer.
Publication on Centrica website
A copy of this announcement is and will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Centrica's website at www.centrica.com during the course of the Offer.
APPENDIX 1
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
1. Conditions of the Offer
The Offer will be subject to the following Conditions (as amended if appropriate):
(A) valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. on the first closing date of the Offer (or such later time(s) and/or date(s) as the Offeror may, with the consent of the Panel or in accordance with the Code, decide) in respect of such number of Venture Shares to which the Offer relates as would result in the Offeror and/or any other members of the Centrica Group holding Venture Shares carrying in aggregate more than 50 per cent. in nominal value of the aggregate of: (i) the total number of Venture Shares; (ii) the maximum or such lesser number as the Offeror may decide of the number of further ordinary shares of Venture as are, or may be required to be, allotted and/or issued pursuant to the Venture Share Schemes, whether or not upon the occurrence of certain events or circumstances; and (iii) the maximum or such lesser number as the Offeror may decide of the number of further ordinary shares of Venture as are or may be required to be allotted and/or issued pursuant to the Convertible Bonds, provided that this condition shall not be satisfied unless the Offeror and/or any other members of the Centrica Group shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, Venture Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at general meetings of Venture and provided further that, unless the Offeror otherwise determines, this Condition shall be capable of being satisfied only at a time when all other Conditions set out in this paragraph 1 have been satisfied or waived. For the purposes of this Condition:
(i) Venture Shares which have been unconditionally allotted but not issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise, shall be deemed to carry the voting rights they will carry on being entered into the register of members of Venture;
(ii) the expression “Venture Shares to which the Offer relates†shall be construed in accordance with Part 28 of the Companies Act; and
(iii) Venture Shares that cease to be held in treasury before the Offer becomes or is declared unconditional as to acceptances are Venture Shares to which the Offer relates;
(B) either:
(i) following confirmation from the European Commission that the proposed acquisition of Venture does not constitute a concentration with a Community dimension within the scope of Council Regulation (EC) 139/2004 (as amended) (for the purposes of this Condition, the “Regulationâ€):
(a) the Office of Fair Trading in the United Kingdom or the appropriate Minister indicating, in terms satisfactory to the Offeror, that it is not the intention of the Office of Fair Trading or the appropriate Minister to refer the proposed acquisition of Venture by the Offeror or any matter arising therefrom or related thereto to the Competition Commission and the deadline for appealing the relevant decision to the Competition Appeal Tribunal having expired with no appeal having been lodged beforehand; and
(b) the Netherlands Competition Authority (Nederlandse Mededingingsautoriteit):
(1) deciding that the proposed acquisition of Venture does not give rise to a concentration falling within the scope of Section 5 of the Dutch Competition Act (Mededingingswet); or
(2) granting a clearance on terms satisfactory to the Offeror, declaring that the acquisition does not require a permit, or is deemed to have granted such a clearance, under Article 37 of the Dutch Competition Act;
or
(ii) insofar as the proposed acquisition of Venture constitutes, or is deemed to constitute, a concentration with a Community dimension within the scope of the Regulation:
(a) the European Commission indicating, in terms satisfactory to the Offeror, that it does not intend to initiate proceedings under Article 6(1)(c) of the Regulation in respect of the proposed acquisition of Venture by the Offeror (or being deemed to have done so under Article 10(6) of the Regulation);
(b) in the event that a decision under Article 9(3) of the Regulation has been made by the European Commission, referring the merger to the Office of Fair Trading and/or the Netherlands Competition Authority, the Conditions above at (B)(i)(a) and/or (B)(i)(b) as applicable being satisfied in respect of such a reference; and where such a reference or references relate to part only of the acquisition, the European Commission having adopted a decision referred to in sub-clause (B)(ii)(a) above in respect of the part of the merger not referred to the Office of Fair Trading and/or the Netherlands Competition Authority; and
(c) no indication having been made that a European Union or EFTA state may take appropriate measures to protect legitimate interests pursuant to Article 21(4) of the Regulation in relation to the proposed acquisition of Venture by the Offeror or any aspect of such acquisition;
(C) there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Venture Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which in consequence of the Offer or the proposed acquisition of any shares or other securities in Venture or because of a change in the control or management of Venture or otherwise, could or might result in:
(i) any moneys borrowed by or any other indebtedness (actual or contingent) of, or grant available to, any such member being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being terminated or modified or affected or any obligation or liability arising or any action being taken or arising thereunder;
(iii) any assets or interests of any such member being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged;
(iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any such member;
(v) the rights, liabilities, obligations or interests of any such member in, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated, modified or affected;
(vi) the value of any such member or its financial or trading position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business under any name under which it presently does so; or
(viii) the creation of any liability, actual or contingent, by any such member,
and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Venture Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, could result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (viii) of this Condition;
(D) without prejudice to any other paragraph of this section 1 of this Appendix 1:
(i) the Secretary of State not having indicated an intention to: (i) revoke or recommend the revocation of any exploration or production licence held by a member of the Wider Venture Group; or (ii) to require a further change of control of Venture or a member of the Wider Venture Group following a change of control of any of them, as a result of the implementation of the Offer; and
(ii) any necessary consents or approvals from the competent authorities in Trinidad and Tobago (including, but not limited to, the Minister of Energy and Energy Industries) having been obtained so as to enable any exploration or production licence held by a member of the Wider Venture Group to continue in full force and effect once the Offer has been declared wholly unconditional and no such authority having indicated an intention to: (i) revoke or recommend the revocation of any exploration or production licence held by a member of the Wider Venture Group; or (ii) require a further change of control of Venture or a member of the Wider Venture Group following a change of control of any of them, as a result of the implementation of the Offer;
(E) no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, association, institution or any other body or person whatsoever in any jurisdiction (each a “Third Partyâ€) having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or enacted, made or proposed any statute, regulation, decision or order, or having taken any other steps which would or might be expected to:
(i) require, prevent or delay the divestiture, or alter the terms envisaged for any proposed divestiture by any member of the Wider Centrica Group or any member of the Wider Venture Group of all or any portion of their respective businesses, assets or property or impose any limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any part thereof;
(ii) require, prevent or delay the divestiture by any member of the Wider Centrica Group of any shares or other securities in Venture;
(iii) impose any limitation on, or result in a delay in, the ability of any member of the Wider Centrica Group directly or indirectly to acquire or to hold or to exercise effectively any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the Wider Venture Group or the Wider Centrica Group or to exercise management control over any such member;
(iv) otherwise adversely affect the business, assets, profits or prospects of any member of the Wider Centrica Group or of any member of the Wider Venture Group;
(v) make the Offer or its implementation or the acquisition or proposed acquisition by the Offeror or any member of the Wider Centrica Group of any shares or other securities in, or control of, Venture void, illegal, and/or unenforceable under the laws of any jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, delay or otherwise interfere with the same, or impose additional conditions or obligations with respect thereto, or otherwise challenge or interfere therewith;
(vi) require any member of the Wider Centrica Group or the Wider Venture Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Venture Group or the Wider Centrica Group owned by any third party;
(vii) impose any limitation on the ability of any member of the Wider Venture Group to co-ordinate its business, or any part of it, with the businesses of any other members; or
(viii) result in any member of the Wider Venture Group ceasing to be able to carry on business under any name under which it presently does so,
and all applicable waiting and other time periods during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any jurisdiction in respect of the Offer or the acquisition or proposed acquisition of any Venture Shares having expired, lapsed or been terminated;
(F) all necessary filings or applications having been made in connection with the Offer and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Offer or the acquisition by any member of the Wider Centrica Group of any shares or other securities in, or control of, Venture and all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions, waiver of pre-emption rights and approvals deemed necessary or appropriate by the Offeror or any member of the Wider Centrica Group for or in respect of the Offer or the proposed acquisition of any shares or other securities in, or control of, Venture by any member of the Wider Centrica Group having been obtained from all appropriate Third Parties or persons with whom any member of the Wider Venture Group has entered into contractual arrangements and all such authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions, waiver of pre-emption rights and approvals together with all material authorisations orders, recognitions, grants, licences, confirmations, clearances, permissions, waiver of pre-emption rights and approvals necessary or appropriate to carry on the business of any member of the Wider Venture Group remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the Offer becomes otherwise unconditional and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;
(G) except as publicly announced by Venture in accordance with the Listing Rules or the Disclosure Rules and Transparency Rules prior to the date of this announcement, no member of the Wider Venture Group having, since 31 December 2008:
(i) save for Venture Shares issued pursuant to the exercise of options granted under the Venture Share Schemes, issued, authorised or proposed the issue of additional shares of any class;
(ii) save for the grant of options under the Venture Share Schemes in the ordinary course, issued or agreed to issue, authorised or proposed the issue of securities convertible into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;
(iii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise;
(iv) merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in each case;
(v) made or authorised or proposed or announced an intention to propose any change in its loan capital;
(vi) issued, authorised or proposed the issue of any debentures or, save in the ordinary course of business, incurred or increased any indebtedness or become subject to any contingent liability;
(vii) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraph (i) above, made any other change to any part of its share capital;
(viii) implemented, or authorised, proposed or announced its intention to implement, any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement or entered into or changed the terms of any contract with any director or senior executive;
(ix) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or could be restrictive on the businesses of any member of the Wider Venture Group or the Wider Centrica Group or which involves or could involve an obligation of such a nature or magnitude or which is other than in the ordinary course of business;
(x) taken any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed;
(xi) entered into any contract, transaction or arrangement which would be restrictive on the business of any member of the Wider Venture Group or the Wider Centrica Group;
(xii) waived or compromised any claim otherwise than of an immaterial amount in the ordinary course of business;
(xiii) entered into any contract, commitment, arrangement or agreement or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition; or
(xiv) proposed, agreed to provide or modified the terms of any Venture Share Scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Venture Group;
(H) except as disclosed in the accounts for the year then ended, or publicly announced in accordance with the Listing Rules or the Disclosure Rules and Transparency Rules by Venture prior to the date of this announcement, since 31 December 2008:
(i) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of any member of the Wider Venture Group;
(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Venture Group is or may become a party (whether as a plaintiff, defendant or otherwise) and no investigation by any Third Party against or in respect of any member of the Wider Venture Group having been instituted announced or threatened by or against or remaining outstanding in respect of any member of the Wider Venture Group;
(iii) no contingent or other liability having arisen or become apparent to the Offeror; and
(iv) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or material modification of any licence held by any member of the Wider Venture Group;
(I) the Offeror not having discovered:
(i) that any financial, business or other information concerning the Wider Venture Group as contained in the information publicly disclosed at any time by or on behalf of any member of the Wider Venture Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make that information not misleading;
(ii) that any member of the Wider Venture Group or a partnership, company or other entity in which any member of the Wider Venture Group has a significant economic interest and which is not a subsidiary undertaking of Venture is subject to any liability (contingent or otherwise) which is not disclosed in the annual report and accounts of Venture for the year ended 31 December 2008; or
(iii) any information which affects the import of any information disclosed at any time by or on behalf of any member of the Wider Venture Group; and
(J) the Offeror not having discovered that:
(i) any past or present member of the Wider Venture Group has failed to comply with any and/or all applicable legislation or regulation, of any jurisdiction with regard to the disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters, or that there has otherwise been any such disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) any of which disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) on the part of any member of the Wider Venture Group; or
(ii) there is, or is likely to be, for that or any other reason whatsoever, any liability (actual or contingent) of any past or present member of the Wider Venture Group to make good, repair, reinstate or clean up any property or any controlled waters now or previously owned, occupied, operated or made use of or controlled by any such past or present member of the Wider Venture Group, under any environmental legislation, regulation, notice, circular or order of any government, governmental, quasi-governmental, state or local government, supranational, statutory or other regulatory body, agency, court, association or any other person or body in any jurisdiction.
2. Certain further terms of the Offer
(A) The Offeror reserves the right to waive, in whole or in part, all or any of the Conditions above, except for Condition 1(A).
(B) Conditions 1(B) to 1(J) (inclusive) must be fulfilled, or waived, by midnight on the 21st day after the later of the first closing date of the Offer and the date on which Condition 1(A) is fulfilled (or in each such case such later date as the Offeror may, with the consent of the Panel, decide). The Offeror shall be under no obligation to waive or treat as satisfied any of Conditions 1(B) to 1(J) (inclusive) by a date earlier than the latest date specified above for the satisfaction thereof, notwithstanding that the other Conditions of the offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.
(C) Except with the Panel’s consent, Centrica Resources will not invoke any of the Conditions 1(B) to 1(J) so as to cause the Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the relevant Condition are of material significance to Centrica Resources in the context of the Offer.
(D) If the Offeror is required by the Panel to make an offer for Venture Shares under the provisions of Rule 9 of the Code, the Offeror may make such alterations to any of the above Conditions as are necessary to comply with the provisions of that Rule.
(E) The Offer is final and will not be increased, except that Centrica Resources reserves the right to revise and/or increase the Offer if a competitive situation arises.
(F) Venture Shares acquired under the Offer will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement. Accordingly, insofar as a dividend and/or a distribution and/or a return of capital is proposed, declared, made, paid or payable by Venture in respect of a Venture Share after the date of this announcement, the price payable under the Offer in respect of a Venture Share will be reduced by the amount of the dividend and/or distribution and/or return of capital except insofar as the Venture Share is or will be transferred pursuant to the Offer on a basis which entitles the Offeror alone to receive the dividend and/or distribution and/or return of capital and to retain it. To the extent that a reduction in the price payable pursuant to the Offer in respect of a Venture Share is to apply in respect of a dividend and/or distribution and/or return of capital but that reduction in price has not been effected, the person to whom the Offer price is paid in respect of that Venture Share will be obliged to account to the Offeror for the amount of such dividend or distribution.
(G) In the event that the board of Venture recommends the Offer, the Offeror reserves the right, with the agreement of the board of Venture and the Panel (if required), to elect to implement the Offer by way of scheme(s) of arrangement pursuant to Part 26 of the Companies Act. In such event, such offer will be implemented on the same terms (subject to appropriate amendments as may be required by law or regulation), so far as applicable, as those that would apply to the Offer. In particular, Condition 1(A) will not apply and the Scheme will become effective and binding following:
(i) approval of the Scheme at the court meeting (or any adjournment thereof) by a majority of the Venture Shareholders present and voting either in person or by proxy representing 75 per cent. or more in value of Venture Shareholders;
(ii) the resolutions required to approve and implement the Scheme being those set out in the notice of general meeting of the Venture Shareholders being passed by the requisite majority at such general meeting; and
(iii) the sanction of the Scheme and confirmation of any associated reduction of capital by the Court (in each case with or without modification, and any such modification to be on terms reasonably acceptable to Venture and the Offeror) and an office copy of the order of the Court sanctioning the Scheme and confirming the cancellation of share capital which forms part of it being delivered for registration to the Registrar of Companies in Scotland and being registered by him.
(H) The Offer will lapse if (unless otherwise agreed by the Panel) it:
(i) is referred to a serious doubts investigation under Article 6(1)(c) of Council Regulation (EC) 139/2004; or
(ii) is referred to the Competition Commission,
before 1.00 p.m. on the first closing date of the Offer or the date on which the Offer becomes or is declared unconditional as to acceptances, whichever is the later.
(I) If the Offer lapses it will cease to be capable of further acceptance. Venture Shareholders who have accepted the Offer and the Offeror shall then cease to be bound by acceptances delivered on or before the date on which the Offer lapses.
(J) The availability of the Offer to persons not resident in the United Kingdom or in the United States may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom or in the United States should inform themselves about and observe any applicable requirements.
(K) The Offer will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or e-mail) of interstate or foreign commerce of, or of any facility of a national securities exchange of, any Restricted Jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.
(L) The Offer will be on the terms and will be subject to the Conditions set out in paragraph 1 above, those terms which will be set out in the Offer Documentation and such further terms as may be required to comply with the Listing Rules and the provisions of the Code. This announcement does not constitute an offer or invitation to purchase Venture Shares or any other securities.
(M) The Offer will be governed by English law and be subject to the jurisdiction of the English courts and to the Conditions set out below and in the formal Offer Documentation (including any applicable Form of Acceptance). The Offer will comply with the applicable rules and regulations of the Financial Services Authority and the London Stock Exchange and the Code.
(N) If:
(i) the Offeror waives, in whole or in part, all or any of the Conditions above (excluding Condition 1(A)), as set out in paragraph 2(A) above; or
(ii) the Offeror is required by the Panel to make an offer for Venture Shares under the provisions of Rule 9 of the Code, and the Offeror alters any of the above Conditions as necessary to comply with the provisions of that Rule, as set out in paragraph 2(D) above; or
(iii) the price payable under the Offer in respect of a Venture Share is reduced by the amount of a dividend and/or a distribution and/or a return of capital (where the Venture Share is or will not be transferred pursuant to the Offer on a basis which entitles the Offeror alone to receive the dividend and/or distribution and/or return of capital and to retain it), as set out in paragraph 2(E) above,
Centrica will extend the Offer Period and take such further action as required by the Code or other applicable law.
APPENDIX 2
Definitions
The following definitions apply throughout this document and the accompanying documents, unless otherwise stated or the context otherwise requires:
| “2P reserves†|  | proven reserves plus probable reserves; |
| “Board†| the board of directors of Centrica; | |
| “Business Day†| any day, other than a Saturday, Sunday or public or bank holiday, on which banks are generally open for business in the City of London; | |
| 'Centrica' | Centrica plc, a company incorporated under the Companies Act 1985 (registered under number 3033654, with registered office at Millstream, Maidenhead Road, Windsor, Berkshire SL4 5GD); | |
| “Centrica Group†| Centrica and each of its subsidiaries and subsidiary undertakings from time to time; | |
| 'Centrica Resources' or 'Offeror' | Centrica Resources (UK) Limited, a company incorporated under the Companies Act 1985 (registered under number 6791610, with registered office at Millstream, Maidenhead Road, Windsor, Berkshire SL4 5GD); | |
| “Code†| the City Code on Takeovers and Mergers; | |
| “Companies Act†| the Companies Act 2006 (as amended); | |
| 'Conditions' |
the conditions to the Offer which are set out in paragraph
1 of Appendix 1 to this announcement; |
|
| 'Convertible Bonds' | the 3.25 per cent. convertible unsecured bonds due in 2010 issued by Venture; | |
| “Daily Official List†| the Daily Official List published by the London Stock Exchange; | |
| “Disclosures Rules and Transparency Rules†| the rules and regulations made by the Financial Services Authority in its capacity as the UK Listing Authority under the Financial Services and Markets Act 2000, and contained in the UK Listing Authority's publication of the same name; | |
| 'Enlarged Group' | the combined Centrica Group and Venture Group from the date on which the Offer becomes or is declared wholly unconditional; | |
| 'Exchange Act' | the United States Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; | |
| “Form of Acceptance†| the form of acceptance, and authority, relating to the Offer which will accompany the Offer Document; | |
| “Front Month†| the price for delivery over the course of the calendar month immediately following the month in which the trade date occurred; | |
| 'Goldman Sachs International' | Goldman Sachs International, financial adviser to Centrica and Centrica Resources and corporate broker to Centrica and Centrica Resources; | |
| 'J.P. Morgan Cazenove' | J.P. Morgan Cazenove Limited, financial adviser to Centrica and Centrica Resources; | |
| 'Listing Rules' | the rules and regulations made by the Financial Services Authority in its capacity as the UK Listing Authority under the Financial Services and Markets Act 2000, and contained in the UK Listing Authority's publication of the same name; | |
| “London Stock Exchange†| London Stock Exchange plc; | |
| “NBP†| the National Balancing Point, a virtual trading location for the sale and purchase of UK natural gas; | |
| 'the Netherlands' | the Kingdom of the Netherlands; | |
| 'Offer' | the cash offer to be made by Centrica Resources to acquire all the Venture Shares not already owned by Centrica Resources and, where the context so requires, any subsequent revision, variation, extension or renewal thereof; | |
| 'Offer Document' | the document to be posted to Venture Shareholders and others following the date of this announcement containing, amongst other things, the terms and conditions of the Offer and certain information about Venture, Centrica Resources and the Centrica Group; | |
| 'Offer Documentation' | the Offer Document and the accompanying Form of Acceptance to be posted to Venture Shareholders and others following the date of this announcement; | |
| 'Offer Period' | the period commencing on (and including) 18 March 2009 and ending on the date on which the Offer becomes or is declared wholly unconditional as to acceptances or lapses; | |
| “Offer Price†| 845 pence per Venture Share; | |
| “Panel†| the Panel on Takeovers and Mergers; | |
| “pounds sterlingâ€, “£†or “pence†| the lawful currency of the United Kingdom; | |
| “probable reserves†| those reserves which are not yet proven but which, on the available evidence and taking into account technical and economic factors, have a better than 50 per cent. chance of being produced; | |
| “proven reserves†| those reserves which, on the available evidence and taking into account technical and economic factors, have a better than 90 per cent. chance of being produced; | |
| “RBS†| RBS Corporate Finance Limited and RBS Hoare Govett Limited, financial advisers to Centrica and Centrica Resources; | |
| 'Regulatory Information Service' | any of the services set out in Appendix 3 to the Listing Rules; | |
| 'Restricted Jurisdiction' | Canada, Japan and any other jurisdiction where the relevant action would constitute a violation of the relevant laws and regulations of such jurisdiction or would result in a requirement to comply with any governmental or other consent or any registration, filing or other formality which Centrica Resources regards as unduly onerous; | |
| 'Restricted Overseas Person' | a person (including an individual, partnership, unincorporated syndicate, limited liability company, unincorporated organisation, trust, trustee, executor, administrator or other legal representative) in, or resident in, or any person whom Centrica Resources believes to be in, or resident in, any jurisdiction (other than persons in the UK) whom Centrica Resources determines to treat as restricted overseas persons in order to observe the laws of such jurisdiction or to avoid the requirement to comply with any governmental or other consent or any registration, filing or other formality which Centrica Resources regards as unduly onerous; | |
| 'Scheme' | a scheme of arrangement under Part 26 of the Companies Act between Venture and the Venture Shareholders (should the Offeror elect to make the Offer by way of a scheme of arrangement (as that term is defined in the Companies Act)); | |
| “Secretary of State†| has the meaning given to that term in the Petroleum Act 1998; | |
| 'Third Party' | any central bank, ministry, governmental, quasi-governmental (including the European Union), supranational, statutory, regulatory or investigative body or authority (including any national or supranational anti-trust or merger control authority), national, state, municipal or local government (including any subdivision, court, administrative agency or commission or other authority thereof), private body exercising any regulatory, taxing, importing or other authority, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction, including for the avoidance of doubt the Panel; | |
| 'Trinidad and Tobago' | the Republic of Trinidad and Tobago; | |
| “United Kingdom†or “UK†| the United Kingdom of Great Britain and Northern Ireland; | |
| 'United States' or 'US' | the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction; | |
| “Venture†| Venture Production plc, a company incorporated under the Companies Act 1985 (registered under number SC169182, with registered office at 34 Albyn Place, Aberdeen AB10 1FW); | |
| “Venture Group†| Venture and each of its subsidiaries and subsidiary undertakings from time to time; | |
| “Venture Shareholders†| the holders of Venture Shares, from time to time; | |
| “Venture Shares†| the existing unconditionally allotted or issued and fully paid (or credited as fully paid) ordinary shares of 0.4 pence each in the capital of Venture and any further such shares which are unconditionally allotted or issued on or prior to the date on which the Offer closes or, subject to the provisions of the Code, such earlier date or dates as the Offeror may decide; | |
| “Venture Share Schemes†| the Venture Share Incentive Plan, the 2006 Long Term Share Incentive Plan, the 2008 Long Term Share Incentive Plan, the Annual Deferred Share Bonus Plan, the Employee Annual Bonus Plan, the Venture Production Company Limited Unapproved Share Option Plan, the Venture Production plc 2002 Employee Share Option Scheme and any other arrangements for involving the employees of Venture and/or members of the Venture Group in the share capital of Venture; | |
| 'Wider Centrica Group' | Centrica and its subsidiary undertakings, associated undertakings and any other undertaking in which Centrica and/or any such subsidiary or associated undertakings (aggregating their interests) has or together have a direct or indirect interest in ten per cent. or more of the equity share capital (as defined in the Companies Act); and | |
| 'Wider Venture Group' | Venture and its subsidiary undertakings, associated undertakings and any other undertaking in which Venture and/or any such subsidiary or associated undertakings (aggregating their interests) has or together have a direct or indirect interest in ten per cent. or more of the equity share capital (as defined in the Companies Act). |
For the purposes of this announcement 'subsidiary', 'subsidiary undertaking', and 'undertaking' have the meanings given by the Companies Act and “associated undertaking†has the meaning given by paragraph 19 of Schedule 6 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 other than paragraph 19(1)(b) of Schedule 6 to those Regulations.
Certain other capitalised terms not otherwise defined above are defined and used elsewhere in this document.
All times referred to in this document are London times unless otherwise stated.
APPENDIX 3
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement:
1. Unless otherwise stated:
- financial information relating to the Centrica Group has been extracted or derived (without any adjustment) from Centrica's audited annual report and accounts for the financial year ended 31 December 2008; and
- financial information relating to the Venture Group has been extracted or derived (without any adjustment) from Venture's audited annual report and accounts for the financial year ended 31 December 2008.
2. The value placed by the Offer on the entire existing issued share capital, and other statements (including the size of shareholdings) made by reference to the existing issued share capital, of Venture are based on, as applicable, the Offer Price of 845 pence per Venture Share and 149,769,828 Venture Shares being in issue (as sourced from the Regulatory Information Service announcement released by Venture on 18 March 2009).
3. Unless otherwise stated, all prices quoted for Venture Shares have been derived from the Daily Official List of the London Stock Exchange and represent closing middle market prices on the relevant date.
4. The Offer Price premium calculations have been calculated by reference to prices of:
- 580.0 pence per Venture Share, being the closing price on 17 March 2009, the last trading day prior to commencement of the Offer Period; and
- 450.5 pence per Venture Share, being the closing price on 13 January 2009, the last trading day prior to market and press speculation about a potential offer for Venture by Centrica.
5. The information relating to Venture’s 2P reserves is extracted from, derived from or based on (as applicable) Venture’s announcement, titled “Independent Reserves and Contingent Resources Assessmentâ€, dated 14 May 2009, in which Venture announced the results of an independent reserves and contingent resources evaluation of its asset base, as of 31 March 2009.
6. The information relating to Front Month NBP gas prices, Front Month Brent Crude oil prices and Winter 2009/10 forward NBP gas prices (including the graphs relating to those prices) is derived from data sourced from IntercontinentalExchange.
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