BW Offshore has agreed with BW Group to sell all of its shares in BW Energy.
BW Offshore will sell 58.1m (22.5%) shares in the Oslo-listed company for NOK 32 per share, resulting in total proceeds of NOK 1.86bn or around $176m.
The decision was taken by the independent directors of BW Offshore after assessing the company’s strategy and other relevant factors, including external valuation advice, according to a statement.
As previously communicated, the company does not consider the holding in BW Energy to be a long-term strategic investment.
BW Offshore CEO Marco Beenen said: “We are pleased to have obtained a price for BW Energy that is close to the highest that the shares have historically traded, which became possible following the outcome of BW Group’s mandatory offer resulting in BW Group holding approximately 52% of BW Energy.
“This transaction strengthens our balance sheet and allows the continuation of a sustainable dividend that can potentially grow over time.”
The price of NOK 32 represents a premium of 17% compared with BW Energy’s closing price of NOK 27.35 on Friday in Oslo.
After the transaction, BW Offshore will no longer hold any shares in BW Energy.
BW Offshore has indirect exposure to 353,425 shares in BW Energy through a total return swap agreement expiring on 5 April 2024.
BW Group chairman Andreas Sohmen-Pao said: “Under BW Offshore’s current dividend policy, it would have taken over seven years to distribute BW Offshore’s stake in BW Energy.
“This transaction clears a significant overhang on BW Energy shares, and we look forward to continued efforts to build the company and unlock shareholder value.”
BW Group’s holding in BW Energy has increased to 192m shares, representing an increase from about 51.9% to approximately 74.4% of the issued share capital and voting rights.
The transaction is expected to be completed on or around 25 January.
BW Group in January got a majority in BW Energy after its mandatory offer for the company resulted in a 52% shareholding.
Independent directors of BW Offshore earlier followed the BW Energy board in rejecting the mandatory offer priced at NOK 27 per share.
BW Group has said it reserves the right to delist BW Energy from the Oslo Stock Exchange.
