The Hurricane Energy PLC (LON: HUR) share price surged 25.4% after announcing that it had agreed to be acquired by the Prax Group in a complex deal that could see its shareholders receive up to 12.50p per share, representing an 84% premium to the HUR closing share price of 6.80p on 1 November 2022.
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However, the rally in HUR shares did not come close to the top consideration figure given the complex nature of the deal that could see the shareholders receive a minimum payment of 4.15p per share, representing a 39% discount to the HUR closing share price of 6.80p when the formal sale process began.
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Prax will execute the acquisition via a court-sanctioned scheme of arrangement, which ends the formula sale process (FSP) conducted by Hurricane Energy at the request of one of its shareholders who wanted to cash out of their position, as detailed in an earlier report.
Each Hurricane shareholder will receive an initial consideration of 4.15p per share in cash, of which 3.32p will be a transaction dividend totalling £66.1 million. The shareholders will also receive a cash consideration of 0.83p for each share, adding up to £16.5 million. The two payments are regarded as firm proceeds.
Furthermore, the Hurricane shareholders are entitled to receive a supplementary dividend of up to 1.87p per share in cash, worth a total of £37.2 million. Lastly, the shareholders could also receive a deferred consideration unit of up to 6.48p, worth a whooping £129.1 million.
If the acquisition delivers the total value to shareholders, they will receive 12.50p per share for a total payout of £249 million. To pay the supplementary dividend of 1.87p, Hurricane must have lifted the April cargo of a minimum of 450,000 barrels of oil and received the sale proceeds.
Hurricane Energy shareholders are also entitled to receive 17.5% of all future net revenues the company generates up to a maximum of 6.8p per share, which completes the deferred consideration units.
*This is not investment advice.
Hurricane Energy (HUR) share price.
The Hurricane Energy share price surged 25.39% to trade at 8.752p, from Wednesday’s closing price of 6.980p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.