Vallares Plc, the investment vehicle backed by former BP Plc Chief Executive Officer Tony Hayward, raised 1.35 billion pounds ($2.2 billion) in a share sale today, more than originally planned.
The company, also sponsored by financiers Nathaniel Rothschild and Tom Daniel and former Goldman Sachs Group Inc. banker Julian Metherell, sold 133 million shares at 10 pounds each after initially targeting 1 billion pounds. The 1.35 billion pounds raised includes 100 million pounds from the four founders, the company said in a statement in London today.
Vallares will seek to buy a company or asset with an enterprise value of 3 billion to 8 billion pounds within two years, the statement said. The initial public offering is a comeback for Hayward, who left BP in October after the worst oil spill in U.S. history at the company’s Macondo well in the Gulf of Mexico. He may be put in charge of any company that Vallares acquires, Metherell said today.
“It is heartening to receive the backing of so many investors and to reach the fund-raising target so quickly,” Hayward said in a statement. “This demonstrates the confidence investors have in the strong fundamentals of the resources sector and our focus will now turn to searching for suitable acquisition opportunities.”
The shares fell 0.5 percent to 995 pence as of 9:04 a.m. in the first day of trading on the London Stock Exchange today. The placing comes one month after commodities trader Glencore International Plc first sold shares. Glencore has dropped more than 10 percent since its May 19 IPO.
The Vallares listing received the most support from funds in the U.S. and the U.K., and some sovereign wealth funds in the Middle East are also represented on the register, Metherell said on a conference call with journalists in London.
Vallares has a “pipeline of potential deals” and will focus on emerging markets such as Russia, Latin America, Africa or the Middle East, Hayward said in a June 9 interview, without identifying any specific targets.
The four founders have committed 100 million pounds of capital to the company, 80 million pounds of which is ordinary shares. If the company fails to find a deal in the next two years, the cost of running the company in the period would be covered by the founders’ equity, while other investors will get all or most of their money back, Metherell said.
“From an investor point of view, they can see that we have significant skin in the game,” Metherell said. The founders are set to receive 6.67 percent of share capital on completion of the first transaction. Metherell declined to say what the founders’ ownership percentage is in Vallares after the IPO.
Vallares is modeled on Rothschild’s Vallar Plc, which raised 707.2 million pounds in a July IPO to buy mining and commodity assets, Vallar agreed in November to invest $3 billion in Indonesian coal companies PT Bumi Resources and PT Berau Coal Energy in a stock and cash transaction.
The board of directors will be chaired by Rodney Chase, former chairman of Petrofac Plc, and the board will include Jim Leng, former chairman of Corus Group Plc. Credit Suisse, JPMorgan Cazenove and Evolution Securities advised on the share placing.