Wafi Energy completes acquisition of 11.29% stake in Shell Pakistan

October 08, 2024 (MLN): Wafi Energy Holding Limited has successfully completed its acquisition of 11.29% of the total issued and paid-up share capital of Shell Pakistan Limited at Rs155.11 per share.

This was communicated by Arif Habib Ltd (PSX: AHL), the manager of the offer, who issued a final report regarding the aforementioned scheme of arrangement.

Earlier on October 07, 202, the brokerage house disclosed that the acquirers had fulfilled all their obligations under the Securities Act 2015 and the Listed Companies Regulations, 2017.

Public Announcement of Intention

On October 31, 2023, the Acquirers submitted the notice for the Public Announcement of Intention to acquire 165,700,304 ordinary shares (representing about 77.42% of the total issued and paid-up share capital) and of the Target Company.

Subsequently, an addendum to the public announcement of intention was published on April 5th, 2024 due to a change in the capital ownership structure of the Acquirer, a new foreign entity "Wafi Energy Holding Limited" replaced Wafi energy LLC as "Acquirer" for Acquisition of up to 77.42% shares of the Target Company with Asyad Holding acting in concert.

Determination of Offer Price

The Manager to the Offer undertook a valuation exercise to determine the offer price in accordance with regulation 13 of the Regulations.

According to regulation 2(1)(ca) of the Regulations, shares are deemed to be 'frequently traded shares' if they are traded for at least 80% of the trading days during 180 days prior to the date of Public Announcement of Public Offer
and if their average daily traded volume is not less than 0.5% of its free float or 100,000 shares, whichever is higher.

The shares of the Target Company were frequently traded based on percentage of trading days, having traded for 100% of the market trading days and based on its ADTV of 779,086 shares, which is greater than 267,531 shares (higher of 100,000 and 267,531 i.e. 0.5% of the Target Company's free float of 53,506,166).

Opening a CDS Account

For the purposes of the Public Offer, a CDS Account titled "Manager to the Offer — Shell Pakistan Limited" was opened.

All shareholders who wished to tender their electronic shares in the Public Offer had to transfer their shares into this account, from which the shares were later reversed to the shareholders' respective accounts (in the case shares are tendered in excess of the offer) and transferred to the Acquirers.

Provision of Security

Pursuant to regulation 15 of the Regulations and section 123 of the Act, Wafi Energy Holding Limited. (for and on behalf of the Acquirers) provided security in the form of the Bank Guarantees.

The Bank Guarantee Amounting to PKR 3,899,000,000 /- against the offer size of Rs3,747,795,585, calculated using the offer size of 24,162,179 shares at Rs155.11 per share.

Based on the above, a due diligence certificate was issued by the Manager to the Offer on July 25, 2024 and the PAO was submitted to the Commission, the Exchange and the Target Company on July 25, 2024 in accordance with regulation 7(2) of the Regulations.

The same PAO was published in newspapers on July 27, 2024.

The Public Offer No Competitive Bid

In accordance with regulation 17(1) of the Regulations and section 120 of the Act, the final date for submission of a competitive bid was within 21 days of the PAO. However, no competitive bid was received.

Book Closure

The book closure period to determine eligibility of shareholders to receive an offer letter commenced on September 01, 2024 and ended after a period of seven (7) days on September 07, 2024, in accordance with regulation 9 of the Regulations.

During that period, the books of the Target Company remained closed.

A notice announcing the Book Closure Date was published in newspapers on August 17th, 2024.

List of Shareholders

The Target Company provided the list of registered shareholders of the Target Company at the Book Closure Date to the Manager to the Offer and the Acquirers on September 01, 2024 as per regulation 11(1) of the Regulations.

Offer Letter

A copy of the proposed Offer Letter was submitted to the Commission, the Exchange and the Target Company on July 29, 2024 as per regulation 24(4) of the Regulations.

The Offer Letter, which included the Acceptance Letter and instructions to participate in the Public Offer, were dispatched to all registered shareholders of the Target Company after the Book Closure Date on September 10th, 2024.

Advertisement on Acceptance Period

Following the dispatch of Offer Letters to shareholders, an advertisement regarding the acceptance period that commenced from September 13th, 2024 and ended on September 19th, 2024 was published on September 11th, 2024.

The notice of the advertisement was submitted to the Exchange on September 11th, 2024.

Details of Acceptances

The Acceptance Period for the Public Offer commenced on September 13th, 2024 and ended at 5:00 pm on September 19th, 2024.

A total of 760 shareholders participated in the Public Offer and tendered a total of 22,165,837 ordinary shares against a total offer size of 24,162,179 ordinary shares of the Target Company.

Therefore, as defined in the Offer Letter dispatched to the shareholders of the Target Company, we accepted all tendered shares from the participating shareholders.

Post-Acceptance Period Formalities

All shares tendered were verified by the Manager to the Offer against the list of shareholders as of the Book Closure Date and maintained by the share registrar of the Target Company, Digital Custodian Company Limited.

Upon confirmation of the accuracy of the share certificates, the Manager to the Offer calculated the allocation ratio for acceptance of the shares tendered and released a notice on the website of the Exchange on September 20th, 2024 indicating the acceptance of the shares tendered.

Proceeds to all tendering shareholders were also dispatched via courier to the addresses of the shareholders, as mentioned on the CDC Register, by September 28, 2024. The proceeds were made through Pay Orders.

Thereafter, the Manager to the Offer sent a letter to the Commission on October 07, 2024, certifying that the Acquirers had fulfilled all their obligations under the provisions of the Takeover Laws.

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