| LONDON, June 13
LONDON, June 13 Vallares, the soon-to-be-listed
acquisition vehicle established by former BP (BP.L) boss Tony
Hayward and financier Nat Rothschild, has defended the payout
its founders will receive if the project is successful.
"Some very large numbers have been used for the conversion
value of the B-Shares in press reports over the past couple of
days, and in practice such a value is highly unlikely," said
Rodney Chase, chairman of Vallares.
Vallares plans to raise 1 billion pounds ($1.6 billion) in a
flotation on the London Stock Exchange in the coming weeks and
to then engineer a reverse takeover of a yet-to-be-identified
emerging market oil and gas company.
The founders are investing 100 million pounds in the
venture, including 15 million in "B" shares that will convert to
6.67 percent of the entire group, providing the founders manage
to seal an acquisition within two years.
Hayward said he planned to create a company big enough to be
in the FTSE 100 index of the biggest companies, suggesting a
market capital of at least 3 billion pounds.
This would suggest the founders would receive a stake worth
200 million pounds ($326 million) in return for their B shares.
But the payout could be much higher.
Vallares said it would seek out targets worth 3 billion to 8
billion pounds, suggesting, in the absence of the target having
debt, that the listed group could be worth up to 9 billion
In this scenario, the founders would net a stake worth up to
600 million pounds ($977 million).
If the deal increased the value of the acquired assets plus
the investors' capital, as the founders intend it to, the payout
would be larger.
Furthermore, the founders will also have "C" shares that
entitle them to 15 percent of any gains above a 25 percent
hurdle rate over four years.
However, Chase said since the acquisition was unlikely to be
at the upper end of the indicated range, the remuneration the
founders will receive was likely to be well below the maximum
Special acquisition vehicles often charge large fees or seek
a chunk of any investors' upside they create.
(Reporting by Tom Bergin; Editing by Will Waterman)