Vivo is going to Vitol
Published Date: 2021-11-26 | Source: INCE|Community | Author: The Finance Ghost
Vivo Energy Plc is a below-the-radar listed company that operates over 2,400 service stations (petrol forecourts) in 23 countries under the Shell and Engen brands.
Additionally, Vivo provides fuels, lubricants and liquefied petroleum gas (LPG) to business customers in a range of sectors. It also exports lubricants to a number of African countries and has a joint venture with Shell to source, blend, package and supply Shell-branded lubricants.
The primary listing is on the London Stock Exchange and the secondary inward listing is on the JSE, although probably not for much longer. The company has announced a buyout offer by a newly-formed company linked to Vitol Investment Partnership II Limited.
Vitol is a global energy company which serves as an intermediary between producers and consumers. It's not difficult to see why Vivo fits the strategy. Vitol already owns 36% of Vivo. Helios, a founding entity of Vivo, holds 27.1% in Vivo and has indicated a willingness to transact at this price.
The price is $1.85 in cash per Vivo share, of which $0.06 would be payable in the form of dividends. This is a premium of 24.6% to the closing price on 24 November. A small adjustment will be made to the offer if it only closes after August 2022, as by then the dividend would've been paid anyway.
This is much higher than Vitol's original proposal of $1.55 in February 2021, which was rejected unanimously by the independent directors. This is an excellent example of the independent board functioning as it should.
The latest offer has been supported by the independent board, which has been advised by J.P. Morgan and Rothschild & Co.