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Oslo, 13 September 2021 - Octopus Bidco AS (currently under name change from WR
Start Up 418 AS) (“Octopus Bidco” or the “Offeror”), a company indirectly wholly
owned by funds advised by Kohlberg Kravis Roberts & Co. L.P. and its affiliates
(“KKR”), has reached an agreement with Ocean Yield ASA (“Ocean Yield” or the
“Company”), the Oslo Stock Exchange-listed ship owning company (OSE ticker:
OCY), to launch a recommended voluntary cash tender offer (the “Offer”) for all
outstanding shares (the “Shares”) of the Company.
A cash consideration of NOK 41.00 will be offered per Share, subject to certain
adjustments as described below (the “Offer Price”). The Offer Price implies a
total consideration for all the Shares of approximately NOK 7.2 billion (based
on 175,286,575 Shares outstanding as per 13 September 2021).
The Offer is the result of a strategic process related to the Company. The
independent members of the Company’s board of directors (the “Board”)
unanimously recommend the Offer. Aker ASA (“Aker”), the largest shareholder of
the Company through its subsidiary Aker Capital AS, owning 61.65 per cent of the
outstanding Shares in the Company, has irrevocably undertaken to accept the
Offer on the first day of the offer period.
Vincent Policard, Partner and Co-Head of European Infrastructure at KKR,
comments:
“We have been impressed by what Ocean Yield’s management team and employees have
achieved since the Company was formed a decade ago through the strategy of
investments in modern fuel-efficient vessels on long-term charters. KKR is
excited at the idea of becoming a strategic partner to Ocean Yield’s management
team to continue building a leading ship-leasing company to the benefit of all
stakeholders, including by providing improved access to long-term capital to
meet the substantial investment needs of the sector.”
Øyvind Eriksen, President and CEO of Aker, comments:
“Aker has been the driving force behind the development of Ocean Yield since it
established the company in 2012. The company has since 2012 grown its fleet
significantly from 3 to 63 vessels and is today positioned as a leading maritime
leasing company with a strong backlog towards solid counterparties and a highly
competent management team. As an industrial investment company, Aker is
constantly reviewing strategic options related to its investments and has now
decided that it is time to let a new owner continue the growth journey. We are
happy to see that a renowned investment firm such as KKR recognizes the strength
of Ocean Yield and will support the further growth of the company as the new
owner.”
Lars Solbakken, CEO of Ocean Yield, comments:
“We are pleased that KKR, a leading global investment firm with a strong track
-record in successful partnerships, is becoming a strategic partner to us to
further strengthen Ocean Yield as a leading maritime leasing company. By
leveraging KKR’s capital, expertise and network, Ocean Yield will be well
positioned to develop the business with the intention to build a substantially
larger company. The team is excited for the next phase of developing Ocean
Yield.”
Key terms of the Offer
Under the Offer, the Company’s shareholders will be offered NOK 41.00 per Share
to be settled in cash upon completion. The Offer Price implies:
·
A premium of 26.0 per cent to the closing price of the Shares on the Oslo Stock
Exchange on 10 September 2021 of NOK 32.54.
· A premium of 36.7 per cent to the volume weighted average share price
adjusted for dividend during the last six months up to and including 10
September 2021 of NOK 30.0.
The Offer Price will be (i) reduced by the amount of any dividend or other
distributions made or declared by Ocean Yield with a record date after 12
September 2021 and prior to settlement of the Offer and (ii) increased with any
incremental sales price received by the Company for the FPSO Dhirubhai-1 (the
“FPSO”) above USD 19 million if the FPSO is agreed to be sold prior to
settlement of the Offer as further described below under the heading FPSO Price
Adjustment.
The complete terms and conditions of the Offer will be set out in an offer
document (the “Offer Document”) to be sent to the Company’s shareholders
following review and approval by the Oslo Stock Exchange pursuant to Chapter 6
of the Norwegian Securities Trading Act. The Offer Document is expected to be
approved during September 2021, in order for the offer period to start no later
than 4 October 2021. The Offer may only be accepted on the basis of the Offer
Document.
As further detailed and specified in the Offer Document, completion of the Offer
will be subject to fulfilment or waiver by the Offeror (in its sole discretion,
except for conditions (2) and (6) below which require agreement between both
parties to waive) of the following conditions: (1) Valid acceptance of the Offer
by shareholders of the Company representing 61.65% or more of the issued and
outstanding share capital and voting rights of the Company on a fully diluted
basis, such condition having already been fulfilled through the irrevocable
undertaking by Aker Capital AS to accept the Offer; (2) All permits, consents,
clearances and approvals required for closing of the Offer from the Norwegian
Competition Authority, the German Federal Cartel Office and the Hellenic
Competition Commission having been obtained without conditions or on conditions
as further agreed; (3) The Company’s Board not, without the Offeror’s prior
written consent, having withdrawn its recommendation of the Offer; (4) The
Company and its relevant subsidiaries having obtained consents required from
creditors under its bank financing agreements for the purposes of waiving any
right of prepayment or termination that would otherwise arise as a result of the
Offeror acquiring all or any of the shares in the Company, in accordance with
terms to be further set out in the Offer Document; (5) No material adverse
change having occurred with respect to the Company and its subsidiaries, subject
to exceptions to be further set out in the Offer Document; (6) No governmental
interference hindering consummation of the Offer in accordance with its terms;
(7) No changes to the Company’s share capital, number of shares issued and/or
the par value of the shares having been resolved or completed and (8) The
Transaction Agreement (as defined below) not having been terminated in
accordance with its terms.
The Offer is otherwise not subject to any financing or due diligence conditions.
If, as a result of the Offer, the Offeror acquires and holds more than 90 per
cent of the total issued share capital of the Company representing more than 90
per cent of the voting rights in the Company, the Offeror intends to carry out a
compulsory acquisition of the remaining Shares in the Company. Also, if, as a
result of the Offer, a subsequent statutory mandatory offer or otherwise, the
Offeror holds a sufficient majority of the Shares in the Company, the Offeror
may propose to the general meeting of the Company that an application is filed
with Oslo Stock Exchange to de-list the shares of the Company.
The initial acceptance period in the Offer will commence following publication
of the Offer Document and is expected to last for 21 business days, subject to
any extensions. Barring unforeseen circumstances or any extensions of the
acceptance period of the Offer, it is expected that the Offer will be completed
in Q4 2021.
The Offer will not be made in any jurisdiction in which the making of the Offer
would violate applicable laws or regulations or would require actions which the
Offeror in its reasonable opinion, after having consulted with the Company,
deems unduly burdensome.
Board recommendations and pre-commitments
Octopus Bidco and Ocean Yield have entered into a transaction agreement (the
“Transaction Agreement”) regarding the Offer, pursuant to which the Board has
agreed to recommend the Offer. As part of this, the Board has received a
fairness opinion from its financial advisor DNB Markets, a part of DNB Bank ASA,
concluding that the Offer is fair from a financial point of view to the
shareholders of Ocean Yield. The full recommendation will be included in the
Offer Document.
As the recommendation is made pursuant to the Transaction Agreement, the
recommendation from the Board is not a formal statement made pursuant to
sections 6-16 and 6-19 of the Norwegian Securities Trading Act. The Company has
in this respect engaged Danske Bank as an independent third party and who is
expected to provide the formal statement about the Offer to be issued in
accordance with section 6-16 (1) cf. section 6-19 (1) of the Norwegian
Securities Trading Act.
As part of the Transaction Agreement, and subject to customary conditions and
based on fiduciary duties, the Board has entered into undertakings to only amend
or withdraw its recommendation of the Offer if a competing offer is made, and
such competing Offer fulfils certain agreed terms, including in the case of a
cash offer that the offer is at least 5 per cent higher than the Offer Price,
and the Offeror has not matched such superior offer within up to three business
days after the Offeror has received notice thereof. As part of this, and subject
to customary exceptions, the Board has agreed not to solicit competing offers
from third parties.
Aker, the largest shareholder of the Company through its subsidiary Aker Capital
AS, which owns 108,066,832 Shares, representing 61.65 per cent of the
outstanding Shares in the Company, has irrevocably undertaken to accept the
Offer on the first day of the offer period. In addition, the Offeror has
received pre-commitments from all members of the Company’s Board and executive
management who hold shares in the Company, as well as certain other related
parties, together holding approx. 2.02 per cent of the Company’s shares, in
which they have irrevocably undertaken to accept the Offer on the last day of
the acceptance period for the Offer, however so that the undertakings may be
revoked if the Board has amended or withdrawn its recommendation of the Offer.
FPSO Price Adjustment
The Company and Aker Energy AS (“Aker Energy”) has for some time been in
dialogue regarding the sale of the FPSO to Aker Energy for the use in
development and commercialization of the Deepwater Tano Cape Three Points block
offshore Ghana.
In connection with the Offer, Aker Contracting FP ASA, an indirect subsidiary of
the Company, and Aker Energy has entered into an agreement whereby Aker Energy
(or its nominated affiliate) is granted an option to acquire the FPSO for USD 35
million, exercisable within the earlier of (i) 16 business days prior to
settlement of the Offer and (ii) 15 December 2021 (the “Purchase Option”).
Aker Energy has previously paid Ocean Yield USD 17.9 million as compensation for
certain prior options related to the FPSO as well as certain other services
related thereto. The total investment by Aker Energy in securing the FPSO if the
Purchase Option is exercised, will thus amount to USD 52.9 million. If an
unrelated third party provides an all cash offer acceptable to Aker Contracting
FP ASA, with no material conditions precedent, to purchase the FPSO during the
option period at a price, whether higher or lower than USD 35 million, Aker
Energy shall be entitled to declare the Purchase Option at such time for such
alternative price, subject to a minimum USD 19 million, the assumed scrap value,
in net proceeds after costs).
If Aker Energy exercises its Purchase Option to acquire the FPSO, or an
agreement is entered into by a third party for the purchase of the FPSO no later
than 16 business days prior to the settlement of the Offer, at a price higher
than USD 19 million in net proceeds after costs, the Offer Consideration shall
be increased by the NOK equivalent (based on a USD/NOK 8.15 exchange rate) per
outstanding share in the Company of the difference between (A) the price for the
FPSO (adjusted for any sales costs of Aker Contracting FP ASA if sold to another
party than Aker Energy) and (B) USD 19 million.
If Aker Energy declares the Purchase Option at USD 35 million, the Offer Price
will be adjusted to NOK 41.74, subject to any adjustments for dividend or other
distributions made by the Company.
The Company has in connection with the transaction received a fairness opinion
from Fearnley Securities AS supporting the option price of the FPSO of USD 35
million. The current book value of the unit is USD 51.3 million. The FPSO has
been idle since its last contract in India expired in September 2018.
Sale of JV ownership stake by Aker Capital AS
The Company and Aker Capital AS owns 50 per cent each of OY Holding LR2 Limited
which owns four LR2 product tankers with long-term charter to the Navig8 Group.
At closing of the Offer, Aker Capital AS has agreed to sell its 50 per cent
ownership stake to the Offeror for an aggregate purchase price of USD 5.1
million, (as adjusted pursuant to the share purchase agreement relating to such
acquisition).
Rationale for the Offer
KKR recognises that Ocean Yield has a diversified, young and energy-efficient
fleet with a clear strategic direction and best-in-class management team. Ocean
Yield’s ship leasing model of entering into long-term charter contracts brings
resiliency through economic cycles.
Given the long-term capital requirements of the shipping sector, including in
the context of the structural trend towards decarbonization, KKR believes that a
private setting will provide Ocean Yield with improved access to capital,
thereby benefiting all stakeholders, including Ocean Yield’s employees, existing
and future clients, creditors, and the shipping industry more broadly.
KKR brings significant experience in leasing business models and transportation,
in addition to providing long-term capital through its Infrastructure strategies
and taking a collaborative approach to value creation.
Advisers
DNB Markets, a part of DNB Bank ASA, is acting as financial advisor to the
Company. Advokatfirmaet Schjødt AS is acting as legal advisor to the Company.
Advokatfirmaet BAHR AS is acting as legal advisor to Aker and Aker Capital AS.
Arctic Securities AS is acting as financial advisor to the Offeror. Wikborg Rein
Advokatfirma AS and Simpson Thacher & Bartlett LLP are acting as legal advisors
to the Offeror.
Contacts
Ocean Yield: Marius Magelie (SVP Finance & Investor Relations of Ocean Yield
ASA), Tel +47 24 13 01 82, e-mail: marius.magelie@oceanyield.no.
KKR: Bjørn Richard Johansen (press contact) at First House, Tel +47 47 80 01 00,
e-mail: brj@firsthouse.no.
About Ocean Yield
Ocean Yield ASA is a ship owning company with investments in vessels on long
-term charters. The company has a significant contract backlog that offers
visibility with respect to future earnings and dividend capacity. The Company’s
shares are listed on the Oslo Stock Exchange (ticker OCY).
About KKR
KKR is a leading global investment firm with approximately USD 429 billion in
assets under management as of June 2021 and has a 45-year history of leadership,
innovation and investment excellence. In the past 15 years, KKR has grown by
expanding its geographical presence and building businesses in new sectors, such
as credit, special situations, equity strategies, hedge fund solutions, capital
markets, infrastructure, energy and real estate. KKR’s new efforts are based on
its core principles and industry expertise, allowing it to leverage the
intellectual capital and synergies across its businesses, as well as to
capitalize on a broader range of opportunities.
KKR has significant experience and deep roots in infrastructure investing. KKR
Infrastructure currently manages over USD 38 billion and has made 52 investments
globally over the last 13 years.
KKR believes that the thoughtful management of environmental, social, and
governance (ESG) issues are an essential part of long-term success in a rapidly
changing world. KKR was one of the first major alternative assets investors to
sign the United Nations-backed Principles for Responsible Investment (PRI) in
2009, and KKR’s Responsible Investment Policy (2020) articulates its approach to
integrating the consideration of ESG risks and value creation opportunities into
investment processes globally.
References to KKR’s investments in this announcement may include the activities
of its sponsored funds and insurance subsidiaries.
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements according
to section 5-12 of the Norwegian Securities Trading Act. The information was
submitted for publication, by the Ocean Yield contact person set out above on 13
September 2021 at 07:30 CEST.
The Offer and the distribution of this announcement and other information in
connection with the Offer may be restricted by law in certain jurisdictions.
When published, the Offer Document and related acceptance forms will not and may
not be distributed, forwarded or transmitted into or within any jurisdiction
where prohibited by applicable law, including, without limitation, Canada,
Australia, New Zealand, South Africa, Hong Kong and Japan. The Offeror does not
assume any responsibility in the event there is a violation by any person of
such restrictions. Persons into whose possession this announcement or such other
information should come are required to inform themselves about and to observe
any such restrictions.
This announcement is not a tender offer document and, as such, does not
constitute an offer or the solicitation of an offer to acquire the Shares.
Investors may accept the Offer only on the basis of the information provided in
the Offer Document. Offers will not be made directly or indirectly in any
jurisdiction where either an offer or participation therein is prohibited by
applicable law or where any tender offer document or registration or other
requirements would apply in addition to those undertaken in Norway.
Notice to U.S. Holders
U.S. Holders (as defined below) are advised that the Shares are not listed on a
U.S. securities exchange and that the Company is not subject to the periodic
reporting requirements of the U.S. Securities Exchange Act of 1934, as amended
(the “U.S. Exchange Act”), and is not required to, and does not, file any
reports with the U.S. Securities and Exchange Commission (the “SEC”) thereunder.
The Offer will be made to holders of Shares resident in the United States (“U.S.
Holders”) on the same terms and conditions as those made to all other holders of
Shares of the Company to whom an offer is made. Any information documents,
including the Offer Document, will be disseminated to U.S. Holders on a basis
comparable to the method that such documents are provided to the Company’s other
shareholders to whom an offer is made. The Offer will be made by the Offeror and
no one else.
The Offer will be made to U.S. Holders pursuant to Section 14(e) and Regulation
14E under the U.S. Exchange Act as a “Tier II” tender offer, and otherwise in
accordance with the requirements of Norwegian law. Accordingly, the Offer will
be subject to disclosure and other procedural requirements, including with
respect to the offer timetable, settlement procedures and timing of payments,
that are different from those that would be applicable under U.S. domestic
tender offer procedures and law.
Pursuant to an exemption from Rule 14e-5 under the U.S. Exchange Act, the
Offeror and its affiliates or brokers (acting as agents for the Offeror or its
affiliates, as applicable) may from time to time, and other than pursuant to the
Offer, directly or indirectly, purchase or arrange to purchase, Shares or any
securities that are convertible into, exchangeable for or exercisable for such
Shares outside the United States during the period in which the Offer remains
open for acceptance, so long as those acquisitions or arrangements comply with
applicable Norwegian law and practice and the provisions of such exemption. To
the extent information about such purchases or arrangements to purchase is made
public in Norway, such information will be disclosed by means of an English
language press release via an electronically operated information distribution
system in the United States or other means reasonably calculated to inform U.S.
Holders of such information. In addition, the financial advisors to the Offeror
may also engage in ordinary course trading activities in securities of the
Company, which may include purchases or arrangements to purchase such
securities.
Neither the SEC nor any securities supervisory authority of any state or other
jurisdiction in the United States has approved or disapproved the Offer or
reviewed it for its fairness, nor have the contents of the Offer Document or any
other documentation relating to the Offer been reviewed for accuracy,
completeness or fairness by the SEC or any securities supervisory authority in
the United States. Any representation to the contrary is a criminal offence in
the United States.
Kilde
