Rothschild and Hayward in £1bn float
CITY financier Nat Rothschild and former BP chief executive Tony Hayward set out plans yesterday to raise £1bn in a flotation of their investment vehicle Vallares in London.
The scion of the banking dynasty and former City heavyweight have joined forces to launch Vallares as a cash shell to acquire and expand high-growth but cash-poor emerging market oil and gas companies.
It will take stakes in companies valued at £3-£8bn, offering them Vallares shares instead of a cash buyout, to allow the original management to retain equity in the business as it grows.
The vehicle is a bigger replica of Rothschild’s first such venture, Vallar, which listed last July and raised £707m to invest in resources outfits.
It also marks Hayward’s return to the boardroom after a ten-month exile following his resignation from BP in the wake of the Deepwater Horizon disaster last July.
Vallar is now worth £2.5bn after investing in a $3bn (£1.8bn) reverse takeover of Indonesian coal assets Berau Capital and Bumi Resources, both owned by the Bakrie family.
“Vallar is a proven success and it is clear that the concept applies equally well in the oil and gas sector,” said Hayward. “Many high quality international resource assets have been acquired by family owned or private companies in the last few years.
“We will have the cash, access to funds and the capability to unlock value where the current owners have neither the capital nor technical expertise to develop the assets.”
Vallares will issue £10 shares and expects to close the order book and publish a prospectus on or around 20 June.
ADVISERS: JP MORGAN & CREDIT SUISSE
IAN HANNAM
JP MORGAN
Ian Hannam, managing director at JP Morgan Cazenove, is a highly-experienced mining and resources dealmaker currently advising Gem Diamonds on its acquisition trail, Heritage Oil & Gas and Fresnillo among others.
Hannam was notably unable to participate in metals trader Glencore’s recent IPO due to his long-standing role advising its takeover target Xstrata and close links to its chief executive, Mick Davis, since they worked on the 2001 merger and 2005 London listing of BHP Billiton.
George Maddison, Credit Suisse’s UK investment banking vice chairman, has spent 20 years working on capital markets transactions, and played a vital role during the financial crisis on the Treasury team that devised the plan to refinance the banking sector. However, his advisory work on Prudential’s attempted takeover of Asian insurer AIA last year is, with the other advisers HSBC and JP Morgan, being scrutinised by the FSA.