Recommendation to accept the Offer from Centrica

25th Aug 2009 10:58



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
25 August 2009
FOR IMMEDIATE RELEASE

Recommendation to accept the Offer from Centrica

On 16 July 2009, Centrica Resources (UK) Limited ('Centrica') made a final cash offer to acquire the entire issued (and to be issued) share capital of Venture Production ('Venture'), not already held by it, at an offer price of 845 pence per share (the 'Offer'). On 21 August 2009 the Offer became a mandatory cash offer. 

The Board of Venture Production notes the announcement by Centrica on 24 August 2009 that: 

(a) as at 6:24pm (London time) on 24 August 2009 Centrica either owned or had received valid acceptances of the Offer in respect of a total of 87,868,240 shares, representing in aggregate approximately 58.7 per cent. of the issued share capital of Venture; and

(b) subject to the settlement of a sufficient number of the acquisitions announced by Centrica on 24 August 2009, Centrica will either own or have received valid acceptances of the Offer greater than 50 per cent of the existing issued share capital of Venture and will be able to declare the Offer wholly unconditional.

The Board of Venture continues to believe that Centrica's final offer substantially undervalues Venture. However, the Board recognises that, in the event that the Offer is declared wholly unconditional, Centrica will have control of Venture. Furthermore, should Centrica receive acceptances which result in Centrica holding 75 per cent or more of Venture's shares, Centrica's stated intention is to procure that Venture applies to the UK Listing Authority for the cancellation of its listing on the Official List and to the London Stock Exchange for the cancellation of its admission to trading. Consequently, there is a risk that Venture shareholders who do not accept the Offer could, as a result, own a minority interest in an unlisted company. This would significantly reduce the liquidity and marketability of Venture shares.

Therefore, the Board, which has been so advised by Rothschild, Lambert Energy, Oriel and UBS Investment Bank, recommends that, in the event that the Offer is declared wholly unconditional by Centrica, shareholders accept the Offer, as the directors have decided they will do in respect of their own beneficial holdings. 

Larry Kinch and ArcLight Capital Partners, LLC ('ArcLight') have informed the Board that they intend to assent the shares they control (in the case of ArcLight including those held through a partnership with co-investors) into the Offer, representing an aggregate holding of approximately 19.2 million Venture shares or 12.8 per cent of the issued share capital of Venture. 

The Offer will remain open for acceptance until the next closing date, which will be 1.00 pm (London time) on 14 September 2009. Full details of how to accept the Offer are set out in the Offer document, published on 16 July 2009.

Venture shareholders who require assistance in accepting the Offer (or who require a replacement Form of Acceptance and Election) should telephone Equiniti Limited ('Equiniti') (the receiving agent for the Offer), on 0871 384 2857 (from within the United Kingdom) or +44 121 415 7571 (from outside the United Kingdom). 

However, Venture shareholders should be aware that Equiniti cannot provide any financial, legal or taxation advice in connection with the Offer nor any advice on the merits of the Offer. Venture shareholders who are in any doubt as to what action to take are recommended to seek their own personal financial advice immediately from their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if they are resident in the United Kingdom or, if not, from another appropriately authorised financial adviser in their own jurisdiction.

A copy of this announcement is available to view on Venture's website at www.venture-production.com.

Enquiries:

Venture Production plc  Mike Wagstaff, Chief Executive   Brunswick  Patrick Handley

Telephone: +44 122 461 9000     Telephone: +44 207 404 5959

  

 

Additional information 1. Disclosure of interest and dealings 1.1 Since the publication by the Company of the Valuation Circular there have been the following material changes in the interests and dealings of IFG Trust (Jersey) Limited as trustee of the Venture Production Employee Benefit Trust in Ordinary Shares. (a) Dealings in Ordinary Shares by IFG Trust (Jersey) Limited 58,977 Ordinary Shares were purchased on 14 August 2009 on the London Stock Exchange at 841 pence per Ordinary Share.  (b) Interests of IFG Trust (Jersey) Limited in Ordinary Shares  As at close of business on 24 August 2009 (the latest practicable date prior to publication of this document), 1,929,766 Ordinary Shares were held on trust for the Venture Production Employee Benefit Trust. 2. Directors interests in relevant securities of Venture  As at the close of business on 24 August 2009 (the latest practicable date prior to publication of this document) the Directors, their immediate families and related trusts were unconditionally interested in the following Ordinary Shares:     Director Number of Ordinary Shares Mike Wagstaff 2,491,671 ¹ Jonathan Roger 150,182² Rod Begbie 391,026³ John Morgan 210,000 Larry Kinch 11,049,5724 Tom Blades 7,0005 Robb Turner 8,110,2086 1. 1,860,846 held through Pershing Keen Nominees. 2. 103,421 held through LR Nominees Limited, 11,761 held through Pershing Keen Nominees and 35,000 held for the benefit of Mrs Roger (spouse) through LR Nominees Limited.  3. 353,538 held through Pershing Keen Nominees and 37,488 held through TD Waterhouse Nominees (Europe) Limited. 4. 28,000 held through Bank of New York (as custodians for Mr. Laurence William Kinch) and of remaining 11,021,572, 4,444,500 ordinary shares held by IFG Trust (Jersey) Limited as Trustee of the Larry Kinch Life Interest Trust. 5. Held through HSBC Client Holdings Nominee (UK) Limited. 6. These Ordinary Shares are held legally and beneficially by NSGP Holdings Limited. Robb Turner is also interested in 3.25 per cent. Convertible Unsecured Bonds of Venture due 2010 which currently give the right to convert into 8,287,596 Ordinary Shares which are legally and beneficially held by NSGP Holdings Limited. Robb Turner is a director of NSGP Holdings Limited and a co-principal of ArcLight Capital Partners, LLC (ArcLight), the manager of ArcLight's funds. (b) As at close of business on 24 August 2009 (the latest practicable date prior to publication of this document), the following options and conditional share awards over Ordinary Shares, including Ordinary Shares held under the Share Incentive Plan, had been granted to the Directors their immediate families and related trusts and remained outstanding:       Director Number of Ordinary Shares Details Mike Wagstaff 103,063 (maximum) Under the Long Term Share Incentive Plan 2006 based on Venture's performance for financial years 2007 to 2009 and will vest in 2010.   103,063 (maximum) Under the Long Term Share Incentive Plan 2006 based on Venture's performance for financial years 2007 to 2009 and will vest in 2010.   700,000* Under the Long Term Share Incentive Plan 2008 based on Venture's performance for financial years 2008 to 2011 and will vest in 2011 or 2012.   56,284 Under the Annual Deferred Share Bonus Plan entitlement to shares in respect of performance of Venture for the financial year ended 31 December 2007. Shares will vest in April 2010.   67,124 Under the Employee Annual Bonus Plan 2008 entitlement to shares in respect of performance of Venture for the financial year ended 31 December 2008. Shares will vest in January 2011.     9,272 Held by Share Nominees Limited as trustee under the Share Incentive Plan with The Share Centre. Jonathan Roger 40,418 (maximum) Under the Long Term Share Incentive Plan 2006 based on Venture's performance for financial years 2007 to 2009 and will vest in 2010.   500,000* Under the Long Term Share Incentive Plan 2008 based on Venture's performance for financial years 2008 to 2011 and will vest in 2011 or 2012.   20,220 Under the Annual Deferred Share Bonus Plan for 2008 entitlement to shares in respect of performance of Venture for the financial year ended 31 December 2007. Shares will vest in April 2010.   27,113 Under the Employee Annual Bonus Plan 2008 entitlement to shares in respect of performance of Venture for the financial year ended 31 December 2008. Shares will vest in January 2011.   7,958 Held by Share Nominees Limited as trustee under the Share Incentive Plan with The Share Centre. Peter Turner 500,000* Under the Long Term Share Incentive Plan 2008 based on Venture's performance for financial years 2008 to 2011 and will vest in 2011 or 2012   1,870 Under the Annual Deferred Share Bonus Plan for 2008 entitlement to shares in respect of performance of Venture for the financial year ended 31 December 2007. Shares will vest in April 2010.   60,000 Options at 775p each under the 2002 Employee Share Option Scheme. Exercisable from 19 November 2008 (30,000) and 19 November 2009 (30,000).   41,213 Under the Employee Annual Bonus Plan 2008 entitlement to shares in respect of performance of Venture for the financial year ended 31 December 2008. Shares will vest in January 2011.   1,155 Held by Share Nominees Limited as trustee under the Share Incentive Plan with The Share Centre. Rod Begbie 45,016 (maximum) Under the Long Term Share Incentive Plan 2006 based on Venture's performance for financial years 2007 to 2009 and will vest in 2010.   500,000* Under the Long Term Share Incentive Plan 2008 based on Venture's performance for financial years 2008 to 2011 and will vest in 2011 or 2012.       24,266 Under the Annual Deferred Share Bonus Plan for 2008 entitlement to shares in respect of performance of Venture for the financial year ended 31 December 2007. Shares will vest in April 2010.   41,213 Under the Employee Annual Bonus Plan 2008 entitlement to shares in respect of performance of Venture for the financial year ended 31 December 2008. Shares will vest in January 2011.   9,272 Held by Share Nominees Limited as trustee under the Share Incentive Plan with The Share Centre. \* These numbers are provisional and are based on a 'Stretch' performance basis (i.e. 100% of attributable shares may be released to the participant). 'Exceptional' performance could result in 150% of attributable shares being released to the participant. Please refer to pages 51 and 52 of the Company's annual report and accounts for the year ended 31 December 2008 for more details on the performance criteria under the Long Term Share Incentive Plan 2008.  3. Other information 3.1 Save as disclosed in this document there have been no material changes to the information contained in the Valuation Circular and the Interim Results.  3.2. A Copy of this document will be available for inspection at the offices of Orrick, Herrington & Sutcliffe (Europe) LLP, Tower 42, Level 35, 25 Old Broad Street, London EC2N 1HQ during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) up to and including the end of the Offer Period. 25 August 2009

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Related Shares:

Centrica