Premier Shares Trade again – at Twice the Price

Shares in UK producer Premier resumed trading February 1 following its revision of the money it would pay for E.ON UK’s upstream assets, mostly gas and condensate production. They were trading at midday at 38.75 pence, up from 19p at time of suspension on January 13.

The original offer of $120mn plus working capital of $47mn made the deal size – relative to Premier’s market capital – a reverse takeover and subject to satisfying stiff stock market rules. But enough cash has now been extracted from E.ON as dividends for the takeover to count as a Class 1 deal without affecting the overall value. Class 1 transactions still require the approval of Premier's bondholders and shareholders so it is more onerous than Class 2.

The proposed acquisition will be funded from existing cash resources and adds immediate cash generative production, realises tax synergies on Premier's current $3.5bn UK tax loss position and is accretive to lending covenants, Premier told the London Stock Exchange.

Premier and E.ON have now agreed to reduce the completion adjustment to $15mn and the aggregate consideration for the transaction payable by Premier to $135mn.

William Powell