Heritage Oil founder sells to Qatari sheikh in £1bn deal

 

Simon Neville
Thursday 01 May 2014 00:39
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The former prime minister of Qatar is buying Heritage Oil in a deal that values the explorer founded by the former mercenary Tony Buckingham at nearly £1bn.

The bid sees the FTSE 250 company, whose fields are mainly in Nigeria, become the latest oil firm involved in a takeover, after a series of deals that has brought the sector’s desire for deals back to life.

Heritage’s independent directors yesterday recommended the 320p-a-share offer, with Mr Buckingham’s 34 per cent stake valued at £300m. He has agreed to remain as an adviser to the new owners and retain a 20 per cent stake for at least five years, and will not vote on the deal as a result. Heritage shares rose 23 per cent to 315.2p.

The offer by Al Mirqab Capital, a private investment vehicle of Qatar’s Sheikh Hamad bin Jassim al-Thani, of £924m, is the first major investment by one of Qatar’s richest men since he stood down as chief executive of the oil-rich country’s sovereign wealth fund.

Sheikh Hamad, widely known as HBJ, left his state role after Qatar’s emir Sheikh Hamad abdicated in favour of his son, Sheikh Tamim, last year. While he headed the fund, Qatar became one of the best-known investors in the world, with interests in companies ranging from Barclays to Harrods and the French football club Paris Saint-Germain.

Mr Buckingham founded Heritage Oil in 1992 after a stint as an adviser to the Angolan government’s oil ministry, holding gas and oil exploration interests in offshore Angola.

The business has been through several reincarnations and has most of its interests in Nigeria after an $850m (£550m) investment deal two years ago.

It also has interests in Papua New Guinea, Tanzania, Malta, Libya and Pakistan, with several successes, although it has struggled in recent months.

The sector has seen a flurry of activity recently, with Temasek, the state investment arm of Singapore, paying $150m this month to become a major shareholder in Nigeria-based Seven Energy.

Premier Oil has also recently rejected two bid approaches by Ophir Energy, while the mining firm Glencore Xstrata agreed to buy Chad-based Caracal Energy for about £800m.

Al Stanton, an analyst at Royal Bank of Canada, said: “It’s a welcome shot in the arm in terms of valuations. There is a theme. Companies which are oil and are relatively simpler operations, that is, they’re onshore rather than offshore, they are appealing to people.”

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