Kosmos Energy Statement Regarding Possible Offer for Tullow Oil plc

Rhea-AI Summary

Kosmos Energy has announced it will not proceed with a firm offer to acquire Tullow Oil plc at this time, following earlier preliminary discussions. The company is now bound by Rule 2.8 of the City Code on Takeovers and Mergers restrictions. Kosmos reserves the right to revisit this decision under specific circumstances, including: if Tullow's Board agrees, if a third party makes a firm offer for Tullow, if Tullow announces a Rule 9 waiver proposal or reverse takeover, or if the UK Panel on Takeovers and Mergers determines a material change in circumstances.

Positive

• None.

Negative

• Withdrawal from potential acquisition of Tullow Oil indicates failed M&A strategy
• Loss of potential market expansion opportunity through Tullow Oil acquisition

Insights

Financial Analyst

This announcement marks a significant development in the M&A landscape for oil and gas companies. Kosmos Energy's decision to withdraw from potential acquisition talks with Tullow Oil is noteworthy given both companies' strategic positions in African oil assets. The Rule 2.8 statement effectively puts a temporary halt to any immediate acquisition plans, though the standard escape clauses remain. This decision could impact both companies' market valuations, particularly Tullow Oil, which has been subject to takeover speculation. The withdrawal suggests either valuation disagreements or strategic misalignment between the two companies. Tullow's assets, particularly in Ghana where both companies operate, could have created significant operational synergies, making this withdrawal particularly interesting from a strategic perspective.

Market Research Analyst

The termination of preliminary merger discussions between Kosmos Energy and Tullow Oil represents a missed consolidation opportunity in the African oil sector. Both companies have complementary assets, particularly in Ghana's offshore fields. This development could trigger market speculation about alternative suitors for Tullow Oil, given the reservation clauses in the announcement. The decision comes amid a broader industry trend of consolidation in the oil and gas sector, making the timing particularly significant. The market will likely reassess both companies' standalone valuations, with potential near-term pressure on Tullow's share price as merger premium expectations dissipate.

DALLAS--(BUSINESS WIRE)-- Further to the announcements made by Tullow Oil plc (“Tullow”) and Kosmos Energy Ltd. (“Kosmos”) in relation to very preliminary discussions about Kosmos’ possible offer for Tullow, Kosmos now confirms that it does not intend to make a firm offer for Tullow at this time and is consequently bound by the restrictions under Rule 2.8 of the Code, save in the circumstances set out below.

This is a statement to which Rule 2.8 of the Code applies. As is customary, Kosmos reserves the right to set aside this statement in the following circumstances that are described under Note 2 to Rule 2.8 of the Code:

1. the Board of Directors of Tullow agreeing to this statement being set aside;
2. a third party announcing a firm intention to make an offer for Tullow;
3. Tullow announcing a Rule 9 waiver proposal (as described in Note 1 of the Notes on Dispensations from Rule 9 of the Code) or a reverse takeover (as defined in the Code); or
4. the UK Panel on Takeovers and Mergers (the “Panel”) determining that there has been a material change of circumstances.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.8 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE “CODE”)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

ABOUT KOSMOS

Kosmos is a full cycle deepwater, independent oil and gas exploration and production company focused along the offshore Atlantic Margins. Our key assets include production offshore Ghana, Equatorial Guinea and the U.S. Gulf of Mexico, as well as a world-class gas development offshore Mauritania and Senegal. We also pursue a proven basin exploration program in Equatorial Guinea and the U.S. Gulf of Mexico. Kosmos is listed on the New York Stock Exchange and London Stock Exchange and is traded under the ticker symbol KOS. As an ethical and transparent company, Kosmos is committed to doing things the right way. The Company’s Business Principles articulate our commitment to transparency, ethics, human rights, safety and the environment. Read more about this commitment in our Corporate Responsibility Report. For additional information, visit www.kosmosenergy.com.

RULE 9 WAIVER PROPOSAL AND REVERSE TAKEOVER

A Rule 9 waiver proposal is where the Panel is asked to waive the obligation to make an offer under Rule 9 of the Code which would otherwise arise where, as a result of the issue of new securities as consideration for an acquisition or a cash subscription or in fulfilment of obligations under an agreement to underwrite the issue of new securities, a person or group of persons acting in concert acquires an interest, or interests, in shares which carry 30% or more of the voting rights of a company (to which the Code applies).

A transaction will be a reverse takeover if an offeror (being a company to which the Code applies) might as a result need to increase its existing issued voting equity share capital by more than 100%.

PUBLICATION ON A WEBSITE

In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available on www.kosmosenergy.com no later than 12 noon (London time) on the business day following the date of this announcement. The content of the website referred to above is not incorporated into and does not form part of this announcement.

The person responsible for arranging for the release of this announcement on behalf of Kosmos is Josh Marion.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241217032741/en/

ENQUIRIES

Kosmos

Jamie Buckland, Investor Relations +44 (0) 203 954 2831

Thomas Golembeski, Media Relations +1-214-445-9674

Brunswick Group LLP

+44 (0) 20 7404 5959

Stuart Donnelly

Chris Thompson

Evercore (Financial Adviser to Kosmos)

+44 (0) 20 7653 6000

David Waring

Ed Banks

Hugo Baker

Julien Baril

Source: Kosmos Energy Ltd.

FAQ

Why did Kosmos Energy (KOS) withdraw from making an offer for Tullow Oil?

Kosmos Energy decided not to proceed with a firm offer for Tullow Oil after preliminary discussions, though specific reasons were not disclosed in the announcement.

Under what conditions can Kosmos Energy (KOS) make a new offer for Tullow Oil?

Kosmos can make a new offer if: Tullow's Board agrees, a third party makes a firm offer, Tullow announces a Rule 9 waiver proposal or reverse takeover, or if the UK Panel determines a material change in circumstances.

What restrictions apply to Kosmos Energy (KOS) after withdrawing the Tullow Oil offer?

Kosmos is bound by Rule 2.8 of the City Code on Takeovers and Mergers restrictions, limiting their ability to make another offer unless specific conditions are met.

What regulatory framework governs Kosmos Energy's (KOS) potential acquisition of Tullow Oil?

The potential acquisition is governed by the City Code on Takeovers and Mergers, with specific provisions under Rule 2.8 regarding withdrawal and future offers.