Takeover Panel Auction Procedure introduced under Rule 32.5 (5841H)

TIDMCOV

RNS Number : 5841H

Takeover Panel

13 July 2012

 
                                      OFFERS BY 
                 Shell exploration and production (xl) b.v. ("Shell") 
                                          and 
              PttEP africa investment limited (a wholly-owned subsidiary 
               of ptt exploration and production public company limited 
                                       ("Pttep") 
                                          for 
                               Cove energy PLC ("Cove") 
 On 24 April 2012, Shell announced a recommended cash offer 
  of 220 pence per share for Cove. The Shell offer document 
  was published on 2 May. On 23 May, PTTEP announced a recommended 
  cash offer of 240 pence per share for Cove. The PTTEP offer 
  document was published on 1 June. 
 On the basis that neither offeror has declared its offer 
  final, such that either offer may be increased or otherwise 
  revised, a competitive situation continues to exist for 
  the purposes of Rule 32.5 of the Takeover Code (the "Code"). 
 In the absence of agreement between the parties as to any 
  alternative procedure for resolving this competitive situation, 
  and in order to provide an orderly framework for its resolution 
  in accordance with Rule 32.5 of the Code, the Panel Executive 
  has ruled in the following terms. 
 1.     The latest time by which either offeror will be permitted 
         to announce or make a revised offer, other than in 
         accordance with the procedure set out in paragraphs 
         2 to 21 (the "Auction Procedure") or otherwise with 
         the consent of the Panel, shall be 5.00 p.m. (London 
         time) on Monday, 16 July. For these purposes, a revised 
         offer includes any offer for Cove shares which represents 
         a change in the value or type of the consideration 
         being offered by an offeror under its offer or any 
         alternative offer as at 5.00 p.m. (London time) on 
         Monday, 16 July. This restriction shall not apply 
         in the event that a third party (other than Shell 
         or PTTEP or anyone acting in concert with either of 
         them) announces a firm intention to make an offer 
         for Cove under Rule 2.7 of the Code. 
 2.     If a competitive situation continues to exist as at 
         5.00 p.m. (London time) on Monday, 16 July, the Auction 
         Procedure shall operate as regards any revision of 
         either offeror's offer. 
 3.     If either offeror wishes to announce a revised offer 
         after 5.00 p.m. (London time) on Monday, 16 July, 
         the full text of the revised offer announcement (an 
         "Offer Announcement") must be: 
        (a)    submitted, after 3.00 p.m. but before 4.30 p.m. 
                (in each case London time) on the relevant day, 
                to the Panel Executive; and 
        (b)    submitted, before 5.00 p.m. (London time) on 
                the relevant day, for publication in accordance 
                with Rule 2.9 of the Code, embargoed for publication 
                until that time. 
 4.     If an offeror submits an Offer Announcement to the 
         Panel Executive in accordance with paragraph 3(a), 
         it must then proceed to publish that Offer Announcement, 
         without any amendment and in accordance with paragraph 
         3(b), unless the Panel otherwise consents or directs. 
         If an offeror has not submitted an Offer Announcement 
         to the Panel Executive in accordance with paragraph 
         3(a) then, without prejudice to the generality of 
         paragraph 12(a), it may not then publish any revised 
         offer announcement (whether or not in purported compliance 
         with paragraph 3(b)) on the day in question. 
 5.     For the purposes of the Auction Procedure, the only 
         manner in which either offeror may revise its offer 
         is by unconditionally increasing, by a fixed amount 
         in whole pence, the cash consideration payable under 
         its offer. Neither offeror may introduce any form 
         of alternative consideration or increase the value 
         of the cash consideration payable under its offer 
         by reference to a formula (including, without limitation, 
         a formula that is determinable by reference to the 
         value of any other offer). 
 6.     Either or both offerors may announce a revised offer 
         on Tuesday, 17 July (the "Auction Start Date"). 
 7.     An offeror shall then be able to announce a revised 
         offer on Wednesday, 18 July provided the other offeror 
         has announced a revised offer on Tuesday, 17 July. 
         If neither offeror has announced a revised offer on 
         Tuesday, 17 July, the Auction Procedure shall end 
         at 5.00 p.m. (London time) on Tuesday, 17 July. 
 8.     Subject to any requirements of the Panel as envisaged 
         by paragraph 13, the process described in paragraph 
         7 shall then continue mutatis mutandis on sequential 
         days unless and until, on any given day, neither offeror 
         announces a revised offer, in which case the Auction 
         Procedure shall end at 5.00 p.m. (London time) on 
         the day in question. 
 9.     Each offeror may make only one Offer Announcement 
         per day during the Auction Procedure (including on 
         the Auction Start Date) and any such Offer Announcement 
         must follow the procedures described in paragraph 
         3 and comply with Rule 2.7(d) of the Code. 
 10.    If either offeror announces a revised offer during 
         the Auction Procedure it must (except with the consent 
         of the Panel) publish its revised offer document on 
         or before the seventh day after the date on which 
         the last revised offer is announced by either offeror 
         in accordance with the Auction Procedure. The Panel 
         will consult the board of Cove with regard to any 
         request made by an offeror whose offer following the 
         end of the Auction Procedure represents the lower 
         offer for a dispensation from any obligation to publish 
         a revised offer document. Any such dispensation may 
         be given on such terms as the Panel in its absolute 
         discretion considers appropriate. 
 11.    If the Auction Procedure results in the announcement 
         of a revised offer by either offeror, the offer timetable 
         shall be extended such that the latest date on which 
         either offer may become or be declared unconditional 
         as to acceptances will be the fourteenth day after 
         the latest date on which either offeror publishes 
         its revised offer document in accordance with paragraph 
         10. 
 12.    Between 5.00 p.m. (London time) on Monday, 16 July 
         and the conclusion of the Auction Procedure: 
        (a)    none of Cove, Shell or PTTEP nor any person acting 
                in concert with any of them may, without the 
                prior consent of the Panel, make any public statement 
                in relation to or which could reasonably be expected 
                to affect the orderly operation of the Auction 
                Procedure (including in relation to any revised 
                offer announced by an offeror) or in relation 
                to the terms of Shell's or PTTEP's offer; and 
        (b)    neither offeror nor any person acting in concert 
                with it may deal in relevant securities of Cove 
                or take any steps to procure, amend or renew 
                any irrevocable commitment or letter of intent 
                in relation to Shell's or PTTEP's offer (whether 
                or not either such offer is revised). Following 
                the end of the Auction Procedure, neither offeror 
                nor any person acting in concert with it may, 
                during the offer period, acquire any interest 
                in relevant securities of Cove on better terms 
                than those of its offer. 
 13.    Pursuant to Note 2 on Rule 32.5 of the Code, the Panel 
         may impose a final time limit for announcing revised 
         offers under the Auction Procedure, taking into account 
         representations made by the board of Cove, the revised 
         offers announced during the Auction Procedure and 
         the duration of the Auction Procedure. In the event 
         that the Panel Executive imposes any such final time 
         limit it will be a further requirement of the Auction 
         Procedure that the cash consideration payable under 
         any revised offer announced by Shell must be at an 
         odd-numbered price and that the cash consideration 
         payable under any revised offer announced by PTTEP 
         must be at an even-numbered price. 
 14.    If an offeror purports to revise its offer in a manner 
         which the Panel determines to be in breach of these 
         rules, the Panel may, in its absolute discretion, 
         declare any such revision to be null and void. 
 15.    The Auction Procedure will end only in accordance 
         with paragraphs 7 or 8 or following the expiry of 
         any time limit imposed by the Panel as envisaged by 
         paragraph 13. 
 16.    Time shall be of the essence for the purposes of the 
         interpretation of these rules, unless the Panel otherwise 
         agrees. All times referred to in these rules are to 
         British Summer Time (as stated on the webpage www.greenwichmeantime.co.uk, 
         or, if that webpage is not functioning properly, by 
         reference to such other clock as the Panel shall determine). 
 17.    References in these rules to days are to calendar 
         days (including, for the avoidance of doubt, days 
         which are not business days). 
 18.    Terms used or defined in the Code shall have the same 
         meanings when used in this announcement, unless the 
         Panel otherwise determines. 
 19.    In the event of a dispute as to the interpretation 
         or application of these rules the Panel's determination 
         shall be final, subject to the normal appeal procedures. 
 20.    The Panel reserves the discretion to amend these rules 
         as it sees fit and in its absolute discretion, including 
         in the event of a material development taking place 
         on or prior to 5.00 p.m. (London time) on Monday, 
         16 July (including, for example, the announcement 
         by either offeror of a revised offer or of a no increase 
         statement) or during the Auction Procedure. In particular, 
         the Panel reserves the right to suspend the Auction 
         Procedure (including its commencement) and also reserves 
         the right to suspend the offer timetable, in each 
         case if it considers this to be necessary for any 
         reason. The Panel reserves the right to make any announcement 
         it considers appropriate in these circumstances. 
 21.    The Panel Executive shall in any case, prior to 5.00 
         p.m. (London time) on Friday, 13 July, issue written 
         instructions to each offeror setting out in further 
         detail certain procedural requirements in relation 
         to the Auction Procedure. Such written instructions 
         shall form part of these rules. 
 Each of Shell, PTTEP and Cove has accepted this ruling. 
 13 July 2012 
 

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