Shares of North Sea oil and gas producer Hurricane Energy rose about 17% to around 8p after it received an unsolicited takeover offer at an indicative price of 7.7p cash — a premium of 13% compared to its closing price of Tuesday.
Hurricane Energy’s board will not to recommend the offer to shareholders but said that Crystal Amber Fund Ltd, which holds a 29% stake in the firm, has indicated “its desire to monetise the value of its shareholding”.
Therefore, Hurricane’s board has decided to launch a formal sale process (FSP) “in order to establish whether there is a bidder prepared to offer a value that the board considers attractive.”
Hurricane noted that it is debt free with forecast year-end net free cash of $118 million.
Regarding the possibility of no takeover, Hurricane said: “In the event that the FSP does not result in a transaction, the board intends to commence a significant capital return programme with up to USD70 million, equivalent to 3.1 pence per share, to be returned to shareholders in the first quarter of 2023, upon completion of a capital reduction.
“Following that, and in the absence of more favourable alternatives, further distributions could then be made during 2023 and beyond.”
Reporters: Elizabeth Winter and Tom Budszus
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