Riverstone Energy proposes to return $200m (equivalent to approximately £158m) of its excess capital to shareholders by means of a tender offer at a price of £10.50 per ordinary share.
The tender price represents a premium of approximately 31% to the closing market price of £8.00 on 7 February 2024 and a 16% discount to the NAV of £12.53 as at 31 December 2023.
The company expects to launch the tender offer before the end of this month and that it will close during March. The precise number of ordinary shares that may be acquired in the tender offer will be determined on launch (on the basis of the then prevailing USD:GBP exchange rate), but is expected will represent approximately 36% of the company’s existing ordinary shares (excluding any in treasury). The tender offer needs shareholder approval at an extraordinary general meeting, which is expected to be held in March.
In its latest update, covering the final quarter of 2023, Riverstone Energy said its conventional energy portfolio performed well, gaining 7.6% over the quarter. This improvement was driven largely by Crescent Point Energy’s (fka Hammerhead Energy) 21.1% improvement in share price, countering slight weakness in Permian Resources’ share price in the fourth quarter. Permian Resources was up 44.7% year-over-year in 2023. At the end of December, Crescent Point Energy finalised its acquisition of Hammerhead Energy, which resulted in a $175m distribution to Riverstone Energy and the receipt of 8m shares of Crescent Point Energy (NYSE: CPG). In addition, Onyx distributed €100m of cash to its investors (€300m year-to-date 2023) of which Riverstone Energy received €20m in the fourth quarter and $60m throughout the year.
The value of the decarbonisation portfolio fell by 22.9% during the quarter, driven primarily by its position in Enviva, which lost a whopping 85.4% of its market value due to missed earnings targets, plant-level operational disruption, and ongoing restructuring. In addition, FreeWire lost 75% of its value due to reduced growth projections as the company works to preserve cash in a challenging fundraising and growth environment for EV-related businesses. With the exception of Infinitum, the remainder of the decarbonisation portfolio continued to suffer from fundraising headwinds caused by the impact of rates and lower risk appetite from investors. These businesses will remain susceptible to market volatility until they reach profitability.
RSE : Riverstone Energy launches $200m tender offer