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Equinor pares Lundin stake, gains more exposure to Johan Sverdrup
Posted on Monday, 08 July 2019 12:59
Equinor is capitalising on a portion of its 20.0 per cent shareholding in Lundin Petroleum in return for a 2.6 per cent equity interest in a development project of the Swedish oil and gas exploration and production company. Under the redemption agreement, the Norwegian petroleum and wind energy company will hand over 54.50 million stocks for a total SEK 14.50 billion (USD 1.56 billion) but will retain a 4.9 per cent stake on closing. The price of SEK 266.40 apiece a discount of 8.0 per cent to the close of SEK 289.60 on 4th July and is also more than double the average weighted cost of SEK 121.00 that Equinor paid in 2016 for its initial investment. At the time, the shareholder bought a 12.0 per cent stake in the January of that year and acquired the additional 8.0 per cent through an all share deal to divest its holding in the Edvard Grieg field to Lundin in the June. In the meantime, the Swedish independent oil and gas exploration and production (E&P) company is selling a 2.6 per cent interest in Johan Sverdrup for cash of USD 962.00 million, which includes a USD 52.00 million earnout. Upon? On closing, Equinor will own 42.6 per cent of the oilfield expected to start production in November this year. Lundin chairman, Ian H Lundin, noted the share redemption “at a discount to the market and before the pivotal start-up of the Johan Sverdrup development project” was “was an opportunity which rarely comes along”. He added the deal rationalises the group’s shareholder structure at a time when the E&P company continues to unlock further upside potential from its existing asset base and executes its “proven organic growth strategy”. Zephyr, the M&A database published by Bureau van Dijk, shows 2,045 deals targeting the global oil and gas sector have been announced in 2019 to date, of which 27 focus on the Nordic region. © Zephus Ltd