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Highlights
- Vivo Energy Plc has received USD 2.3 billion acquisition offer from Netherland-based Vitol Group, which already holds a 36.1% stake in the company.
- The Vitol Group has offered USD 1.79 in cash for each share of Vivo Energy’s entire issued and to be issued shares capital.
FTSE 250 listed oil distribution and marketing company, Vivo Energy Plc (LON: VVO), has received USD 2.3 billion acquisition offer from its largest shareholder, The Vitol Group, which made the acquisition offer through its wholly-owned subsidiary VIP-II (Vitol Investment Partnership II Limited), an investment vehicle of the company managed by employees.
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Acquisition offer
The Vitol Group has offered USD 1.79 in cash for each share of Vivo Energy’s entire issued and to be issued shares capital valuing the company at USD 2.3 billion. In addition, the shareholder of Vivo Energy will also be eligible for the interim and special dividend of USD 0.06 per share, bringing the total offer value to USD1.85 per share (GBX 139p per share). The cash offer by the Vitol Group represents a 25% premium to the previous day closing of Vivo Energy.
The current offer is a second takeover attempt by the Vitol Group, which has previously made an unsolicited non-binding proposal of USD 1.55 per share, which the independent directors of the company rejected in February 2021. Vitol Group had a series of negotiations with Helios Entities, the second-largest shareholder of Vivo Energy, before successfully settling at a purchase price of USD 1.79 per share.
Vivo Energy Plc
The company is into distribution and marketing of Shell and Engen branded fuel in the African continent. It has a network of over 2,400 service stations across 23 countries and also offers lubricants, oil change, car wash services to its customers. For the nine months ended 30 September 2021, the company reported a volume of 7,585 million litres with a rise of 19% in gross profit at USD 580 million.
Vitol Group
The Netherland-based Vitol Group is into supply and distribution of crude oil, petroleum products, and natural gas. It is one of the largest oil marketing and commodity trading companies worldwide, generating a revenue of USD 140 billion in 2020. In addition to its core business, the company invests in energy-related assets through its investment vehicle VIP (Vitol Investment Partnership), a wholly-owned subsidiary of the company managed by the employee. The company funds 47.5% of all investment done by VIP II, while the remaining funds come from institutional shareholders. Till date, it has invested in several businesses spread across different.
Bottomline
The company’s board has termed the takeover offer to be fair and reasonable and intends to unanimously recommend the offer to shareholders to approve. The acquisition will help Vitol Energy expand its business in Africa and support Vivo Energy’s management and strategy.
After the acquisition announcement, Vivo Energy shares moved up by over 20%, with a day’s high of GBX 134.80. The stock price currently trades at GBX 133.20 on 25 November 2021 at 10:15 pm GMT+1 with a market cap of £1,411.37 million.
