Bp and Aker announced this Wednesday they are considering the potential block sale of some of the shares they hold together in the independent Norwegian oil and gas producer Aker BP ASA. The sale will go through a private placement.
Firstly, bp and Aker currently hold 108,021,449 and 144,049,005 shares in Aker BP respectively. This represents approximately 40% and 30% of the shares outstanding. The two companies are contemplating selling shares representing approximately a total of 5% of the company’s shares through an accelerated book-building process.
Moreover, according to the statement, the sale will close on November 11; however, both companies can reserve the right to sell fewer shares or none at all if they see fit. If indeed conducted, the sale would be in proportion with the sellers’ current respective holdings.
Consequently, bp would sell approximately 2.1% of Aker BP’s outstanding shares, while Aker would sell approximately 2,9%. If the sale reaches completion, the free float in Aker BP will increase from 30% to 35%.
Thereafter, the oil major and Aker will enter into a six-month lock-up for the shares they currently hold in Aker BP that are not sold as part of the sale; subject to certain exemptions.
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Sale to allow bp divest and meet targets by 2025
About the relevance of the potential sale, Bernard Looney, bp’s CEO, said. “This transaction will enable the oil major to realize some of the considerable value Aker BP has already generated while remaining committed to its ongoing success and value creation for shareholders.”
He also remarked. “Consistent with our longstanding track record of active portfolio management, these divestment proceeds will be expected to strengthen bp’s balance sheet further and support our ongoing buyback commitment.”
On the other hand, Øyvind Eriksen, President and CEO of Aker ASA, said. “Aker has a large portfolio with a variety of investments across different sectors, whereas Aker BP represented 50% of Aker’s gross asset value per 3Q 2021. Aker BP is, and will remain, a core holding in Aker’s portfolio.”
Furthermore, he remarked that the offering aims to balance Aker’s portfolio by freeing up liquidity, diversifying, and growing it.
Finally, if the sale reaches completion, the proceeds will form part of bp’s target of delivering $25 billion of divestment and other proceeds by 2025.
