Ex-BP CEO Hayward, Rothschild in $1.6 billion oil IPO
LONDON (Reuters) - Former BP (BP.L) boss Tony Hayward and financier Nathaniel Rothschild aim to raise around 1 billion pounds ($1.6 billion) with a June listing of an acquisition vehicle that will target oil assets.
Hayward told Reuters the venture, named Vallares, would target an unlisted group in an emerging market which needs capital and expertise to develop its fields.
However, rather than buy the assets for cash, Vallares will offer resource holders shares in itself, some cash for field development and the ability to raise more cash via further Vallares share issues.
"If you are an owner of quality resources in an emerging market and you're limited by capital and capability, but you don't wish to sell for cash ... then this is a very good vehicle," he said in a telephone interview.
"You can merge with us, (and) you retain your ownership in the asset."
Hayward said the structure gave potential partners the advantages of a London listing, something he said would take them at least three years to secure themselves.
The model is also intended to help Vallares avoid the intense competition, and high prices, usually seen when oil assets come up for sale.
In a keenly awaited intention-to-float document, published on Thursday, the group said it would target a "major company, business or asset" with an enterprise value of between 3 billion pounds and 8 billion pounds.
Hayward said Vallares could also consider a couple of smaller deals to bring related assets together. After completion of a deal, Hayward said he would recruit a team to help develop the assets.
"I will build up an operating team around me that suits the deal we do," he said, adding he expected to create an exploration and production company that enters the FTSE 100 index of the biggest UK companies.
VALLAR PART TWO
Vallares is a sequel to Rothschild's Vallar VAAR.L mining investment vehicle which bought interests in Indonesian coal projects and enjoyed a big share price uplift, helped by soaring coal prices.
Rothschild, known as Nat, is a scion of one of the world's best-known banking dynasties and in line to be the fifth baron. Rothschild has diverse business interests and is the richest hedge fund manager in Britain, according to the Sunday Times Rich List.
The initial public offering also marks another step in the return from the business wilderness for Hayward, just weeks after he took a seat on the board of newly listed commodity trader Glencore (GLEN.L).
As head of, and main spokesman for, BP during last year's Gulf of Mexico oil spill, Hayward became the target of harsh criticism from U.S. politicians and the media.
Nonetheless, he said he had received good responses from investors he has so far courted on the East Coast of the U.S., and he expects U.S. investors to take up to around 40 percent of the shares on offer.
UK investors would likely take up half the shares on offer, he added.
Last week two of the sources told Reuters Vallares could secure preliminary interest in up to 80 percent of its stock before going public with its listing plans.
Vallares has other high-profile business people on its board including Jim Leng, a former chairman of steelmaker Corus and former CEO of chemicals group Laporte, and Julian Metherell, a former oil and gas banker at Goldman Sachs.
Rodney Chase, former deputy CEO at BP, will be chairman of the vehicle.
Vallares is targeting a price of 10 pounds per ordinary share and said it hoped to close the book, and allocate shares, on or around June 20.
Europe's IPO market has had a difficult year, with more than 15 deals pulled and many of those that were executed have fallen below their offer price -- a track record which has made jaded investors skeptical about taking part in new offers.
Nonetheless, resources companies are hoping rising oil prices will help them this trend.
On Thursday, Tanzania-focused explorer Ophir Energy, which is backed by steel magnate Lakshmi Mittal, and shale gas explorer 3Legs announced plans to list in London.
Sources close to the Vallares float said the offering would also be helped by its structure.
"Vallares is not directly exposed to market conditions, it is all based around the future acquisitions that they will make," said one source close to the deal.
Credit Suisse (CSGN.VX) is global co-ordinator of the deal and joint bookrunner with JPMorgan Cazenove (JPM.N). Evolution Securities is co-lead manager.
(Additional reporting by Kylie MacLellan, Editing by Julie Crust and Hans Peters)