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RAK Petroleum plc announces share buyback offer

Credit: GlobeNewswire- Published on January 21, 2019
*NOT FOR DIRECT OR INDIRECT RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, INTO OR IN THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, SOUTH AFRICA, JAPAN, THE KINGDOM OF SAUDI ARABIA OR THE UNITED ARAB EMIRATES OR ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.*United Kingdom, 21 January 2019 
*Buyback Offer*

RAK Petroleum plc, the Oslo-listed oil and gas investment company (the “*Company*”), announces its intent to repurchase such number of its class A shares with ISIN GB00BRGBL804 (the "*Shares*") at the Repurchase Price (as defined below) up to a maximum aggregate consideration of US$ 15 million in accordance with the authorization provided at its Annual General Meeting on 1 June 2018 (the "*AGM*"). The Company and SpareBank 1 Markets AS (the "*Manager*") have entered into a repurchase contract in the form approved by the AGM (the “*Repurchase Contract*”), pursuant to which the Manager is initiating a reverse tender offer (the "*Buyback Offer*") to holders of beneficial interests in the Shares. The Manager will then settle the Share repurchase as principal and for its own account, following which the Manager has an obligation to sell the Shares to the Company, which has an obligation to purchase them from the Manager.

The Company has decided to ask the Manager to launch the Buyback Offer at this time because, among other things, (i) its available funds exceed the near-term cash needs of its business, (ii) relatively low liquidity in the market for its shares may be hindering the ability of some shareholders to sell, and (iii) the Company believes its shares are undervalued relative to their intrinsic value. Thus, the Buyback Offer may be seen as providing an opportunity for some shareholders to sell their Shares.

The Buyback Offer will commence on 21 January 2019 at 8:00 CET and will expire on 31 January 2019 at 14:00 CET, unless extended at the sole discretion of the Company (the "*Buyback Offer Period*"). The Company, by way of instruction to the Manager, shall be entitled in its complete discretion to waive, amend, extend, accelerate, terminate or withdraw the Buyback Offer at any time before expiry of the Buyback Offer Period. Information regarding any such amendments will be published under the Company's ticker "RAKP" on www.newsweb.no.

The number of Shares to be repurchased, if any, and the price per Share will be determined through a reverse bookbuilding process in which Eligible Shareholders (as defined below) may offer to tender to the Manager all or a portion of their Shares at prices they set. The Buyback Offer is not conditional on any minimum number of Shares being tendered. It is proposed that the Company repurchase such number of Shares at the Repurchase Price (as defined below) up to a maximum aggregate consideration of US $15 million (the "*Cap*"). Shares repurchased will be cancelled and result in a reduction of the Company’s registered share capital.

If the Company elects to acquire Shares pursuant to the Buyback Offer, it will select one price to be paid for all the Shares validly offered for tender at and below that price (the "*Repurchase Price*"), but it may in its sole discretion direct the Manager to accept all, or a pro-rata portion of, any offers to tender Shares which are tendered at a price equal to or below the Repurchase Price. Any acceptances of Offers will be subject to the Cap.

Shareholders offering to sell their Shares at prices lower than the Repurchase Price selected by the Company will receive the higher Repurchase Price for their Shares. Offers to sell Shares at prices higher than the Repurchase Price selected by the Company will not be accepted and will not result in a Share sale.

Subject to any amendments of the Buyback Offer Period, the Company expects to announce the results of the Buyback Offer on 31 January 2019 under the Company's ticker "RAKP" on www.newsweb.no. The Company will then announce whether it will buy back any Shares and, if so, the number of Shares to be repurchased and their Repurchase Price.

*Shareholders who do not intend to offer to sell any of their Shares in the Buyout Offer do not need to do anything in response to the Buyback Offer or this announcement. *

Eligible Shareholders who wish to offer for sale all or a portion of their Shares must complete and sign the tender form available on the Company’s website at  http://www.rakpetroleum.uk (the "*Tender Form*") and submit it by e-mail to the Manager at offering@sb1markets.no before expiry of the Buyback Offer Period.

Offers to sell Shares are binding on the shareholder and irrevocable until expiry of the Buyback Offer Period and may until such time not be withdrawn, modified or altered.

All Eligible Shareholders who may want to participate in the Buyback Offer must be registered clients of the Manager. If a Shareholder is not a current client of the Manager, it must complete the Manager's client registration process, including applicable know-your-customer and anti-money laundering requirements, as set out in Appendix 1 to the Tender Form. *Eligible Shareholders who may wish to tender Shares in the Buyback Offer should immediately begin the client registration process by completing Appendix 1 to the Tender Form and submitting the relevant documents to the Manager by 24 January 2019*. However, the Manager will use reasonable efforts to process the client registration also for any such documents submitted after 24 January 2019 on a first-come, first-serve basis, but no assurance can be given that any documents submitted after 24 January 2019 will be processed prior to expiry of the Buyback Offer Period. Even if the documents are completed and submitted to the Manager by 24 January 2019, there can be no assurance that the Manager will be able to complete the client registration process to its satisfaction prior to the end of the Buyback Offer Period due to follow-up requests which, in the Manager's sole discretion, are not met, the Manager's internal policies relating to registration of new clients or otherwise.  

*Fulfilling the Manager’s client registration requirements does not obligate a Shareholder to submit a Tender Form or to participate in the Buyback Offer. If the Eligible Shareholder does not complete the client registration process before the end of the Buyback Offer Period, its Tender Form will not be accepted.*

*If an Eligible Shareholder holds Shares registered in the name of and through a financial intermediary (including a special purpose vehicle) and intends to tender its Shares in the Buyback Offer, it must contact the financial intermediary and instruct it accordingly.* *The Company suggests that such shareholders begin that process immediately as well. *

Cash settlement for the Shares acquired in the Buyback Offer is expected to be on or about 7 February 2019, unless settlement is delayed due to technical and/or administrative reasons, by way of transfer to the bank account registered on the respective Eligible Shareholders' VPS account for dividend payments.

Restricted class A shares with ISIN GB00BWWCMD47 (the "*Restricted A Shares*") cannot be offered for sale in the Buyback Offer. However, holders of Restricted A Shares may submit an exchange request to redesignate the Restricted A Shares to Shares and the Company will act on that request expeditiously. A redesignation request is irrevocable and will result in the transfer and cancellation of the Class B Shares (and their votes) associated with those Restricted A Shares. There is no assurance that any redesignated Shares will be sold in the Buyback Offer. *In order for the Company to act on a redesignation request in time for redesignated Restricted A Shares to participate in the Buyback Offer, **a Shareholder holding Restricted A Shares must submit a Redesignation Request to the Company no later than 14:00 CET on 29 January 2019. To effect the redesignation in the VPS the shareholder must also contact the operator of its VPS account** and have that VPS account operator contact the VPS Registrar, DNB Bank ASA, no later than 10:00 CET on 30 January 2019. The form of the redesignation requests will be available on the Company’s website and from ir@rakpetroleum.uk.  *

For U.K. Companies Act 2006 (the "*Act*") reasons, the Company can only purchase its Shares using the "off-market" purchase provisions pursuant to the Act. The Company and the Manager entered into the Repurchase Contract to comply with the specific procedures governing such "off-market purchases.”

The Buyback Offer is not being made, directly or indirectly, in, into or from, by use of the mails of, or by any other means or instrumentality (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of foreign or interstate commerce of, or any facilities of a national, state or other securities exchange of, any jurisdiction where to do so is prohibited by applicable law, or where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Buyback Offer is sent to shareholders in that jurisdiction, including, but not limited to, the United States, Canada, Australia, New Zealand, South Africa, Japan*, *the Kingdom of Saudi Arabia or the United Arab Emirates (each a "*Restricted Jurisdiction*"), and shall not be capable of acceptance by any such use, means, instrumentality or facility or from or within any Restricted Jurisdiction (save in compliance with local laws or regulations). Upon request, the Manager may make the Buyback Offer documentation available to certain Shareholders and may accept offers made by certain Shareholders, in accordance with the Offer and Distribution Restrictions in the Tender Form.

The Manager will only accept offers from a shareholder or beneficial owner of Shares (or any person acting as agent, custodian, fiduciary or in another intermediary capacity for such shareholder or beneficial owner) who (i) is not a U.S. person (as such term is defined pursuant to Regulation S under the US Securities Act of 1933, as amended), or is not located or resident in the United States, or (ii) is not ordinarily resident in, does not have a registered address in or is not a citizen of a Restricted Jurisdiction where such residency, registered address or citizenship prohibits acceptance of the Buyback Offer, or (iii) is not located in any other jurisdiction where acceptance of the Buyback Offer is prohibited ("*Eligible Shareholders*").

The Tender Form will be published on the Company’s website at rakpetroleum.uk or can be obtained by contacting SpareBank 1 Markets AS on +47 24 14 74 70 or offering@sb1markets.no, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction.

*Disclosure Guidance and Transparency Rules*

The Company notes that, if the Buyback Offer is consummated and cancellation of the Shares occurs, the loss of voting rights associated with the Shares will reduce the total voting rights of the Company. This will automatically increase the percentage of voting rights held by any existing shareholder that has not otherwise altered its shareholdings. In accordance with the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority and the Articles of Association of the Company, this diminution of the total voting rights of the Company may trigger an obligation on the part of a shareholder to notify the Company because its interest in the Company reaches, exceeds, or falls below the respective thresholds of 3 percent and each 1 percent threshold thereafter up to 100 percent.* Shareholders holding significant interests in the Company should immediately monitor their compliance with these requirements.*

*UK Takeover Code requirements*

As a company incorporated under the laws of England and Wales with its registered office in the United Kingdom whose securities are admitted to trading on a regulated market in Norway only (on the Oslo Stock Exchange), the Company is subject to the shared jurisdiction of the United  Kingdom and Norway in takeover matters under the Directive on Takeover Bids (2004/25/EC) (the "*Takeover Directive*"). As a shared jurisdiction company, the Takeover Directive provides that matters relating to the employees of the offeree company and matters relating to company law, in particular the percentage of voting rights conferring “control” and any derogation from the obligation to launch a bid, as well as the conditions under which the board of the offeree company may undertake any action which might result in frustration of the bid, shall be determined by the UK City Code on Takeovers and Mergers (the "*UK Takeover Code"*).

Under Rule 9 of the UK Takeover Code, if an acquisition of an interest in shares were to increase the aggregate holding of the acquirer and its concert parties to an interest in shares carrying 30 percent or more of the voting rights in the Company, the acquirer and its concert parties, would be required (except with the consent of the Panel on Takeovers and Mergers (the "*UK Takeover Panel*")) to make a cash offer for the outstanding shares in the Company at a price not less than the highest price paid for interests in shares by the acquirer or its concert parties during the previous 12 months (a "*mandatory offer*"). This requirement would also normally be triggered by any acquisition of an interest in shares by a person who (together with its concert parties) is interested in shares which in aggregate carry not less than 30 percent of the voting rights in the Company but does not hold more than 50 percent of such voting rights in the Company, if the effect of such acquisition were to increase that person’s percentage of voting rights in the Company. Rule 37 of the UK Takeover Code extends this principle so that when a company redeems or purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purposes of Rule 9 of the UK Takeover Code. Rule 37 of the UK Takeover Code provides that, subject to prior consultation, the UK Takeover Panel will normally waive any resulting obligation to make a general offer if there is a vote of independent shareholders and a procedure along the lines of that set out in Appendix 1 to the UK Takeover Code is followed. Appendix 1 to the UK Takeover Code sets out the procedure which should be followed in obtaining the consent of independent shareholders. Under Note 1 on Rule 37 of the UK Takeover Code, a person who comes to exceed the limits in Rule 9.1 in consequence of a company’s purchase of its own shares will not normally incur an obligation to make a mandatory offer unless that person is a director, or the relationship of the person with any one or more of the directors is such that the person is, or is presumed to be, a concert party with any of the directors of that company.

Persons acting in concert comprise persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control of a company or to frustrate the successful outcome of an offer for a company. Certain categories of people will be presumed to be acting in concert with each other unless the contrary is established. The UK Takeover Panel has confirmed to the Company that it would treat the Company’s Executive Chairman, Mr. Bijan Mossavar-Rahmani, as acting in concert with DNO ASA, of which he is also Executive Chairman. Mr. Mossavar-Rahmani's interest in the total voting rights of the Company is currently 36.88 percent and DNO ASA's is 7.71 percent, resulting in an aggregate 44.59 percent.

The UK Takeover Panel has confirmed that if prior to, or simultaneously with, the cancellation of Repurchased Shares, on Mr. Mossavar-Rahmani's and DNO ASA's respective instructions, the Company redesignates such number of their respective Restricted A Shares as Shares and cancels the equivalent number of their respective associated Class B Shares, such that Mr. Mossavar-Rahmani's total voting rights aggregated with those of DNO ASA do not increase beyond 44.59 percent, no mandatory bid would be triggered under Rule 9 of the UK Takeover Code, as result of the cancellation.

Mr. Mossavar-Rahmani has confirmed that he does not intend to offer any of his Shares for sale in the Buyback Offer. Mr. Mossavar-Rahmani has also provided the Company with an irrevocable undertaking, conditional on the Company announcing that it intends to repurchase Shares pursuant to the Buyback Offer, whereby Mr. Mossavar-Rahmani undertakes to request (i) such number of his Restricted A Shares be redesignated as Shares, and (ii) the equivalent number of his associated Class B Shares be cancelled, such that his voting rights in the Company aggregated with his concert party's voting rights, do not increase beyond the existing level of 44.59 percent.

In addition, DNO ASA, has confirmed that it does not intend to offer any of its Shares for sale in the Buyback Offer and has also provided the Company with an irrevocable undertaking, conditional on the Company announcing that it intends to repurchase Shares pursuant to the Buyback Offer, whereby it undertakes to request (i) such number of its Restricted A Shares be redesignated as Shares, and (ii) the equivalent number of its associated Class B Shares be cancelled, such that its voting rights do not increase beyond its existing level of 7.71 percent. 
*For further queries, please contact:*

SpareBank 1 Markets AS
Email: offering@sb1markets.no
Phone: +47 24 14 74 70

*IMPORTANT NOTICE*

This announcement is not for publication, distribution or release, directly or indirectly, in whole or in part, in or into the United States, Canada, Australia, New Zealand, South Africa, Japan, the Kingdom of Saudi Arabia or the United Arab Emirates or any other jurisdiction where such an announcement would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons who come into possession of this announcement or any related document or other information referred to herein should inform themselves about and observe any such restrictions.

The Buyback Offer is not being made, directly or indirectly, in, into or from, by use of the mails of, or by any other means or instrumentality (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of foreign or interstate commerce of, or any facilities of a national, state or other securities exchange of, any Restricted Jurisdiction, and shall not be capable of acceptance by any such use, means, instrumentality or facility or from or within any Restricted Jurisdiction (save in compliance with local laws or regulations).

Accordingly, copies of this announcement or the Tender Form are not being and must not be, directly or indirectly mailed, transmitted or otherwise forwarded, distributed, sent or otherwise made available (including, without limitation, by agents, custodians, nominees or trustees) in, into or from a Restricted Jurisdiction, and persons receiving this announcement and/or the Tender Form and/or any related documents (including, without limitation, agents, custodians, nominees and trustees) should observe these restrictions and must not mail or otherwise forward, distribute, send or otherwise make them available in, into or from such Restricted Jurisdiction. Doing so may render any purported acceptance of the Buyback Offer invalid.

If, in connection with making the Buyback Offer, notwithstanding the restrictions described above, any person (including, without limitation, custodians, nominees and trustees), whether pursuant to a contractual or legal obligation or otherwise, forwards this announcement or the Tender Form or any related documents in, into or from a Restricted Jurisdiction or uses the mails of, or any means or instrumentality (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of foreign or interstate commerce of, or any facilities of a national, state or other securities exchange of, a Restricted Jurisdiction in connection with such forwarding, such persons should (a) inform the recipient of such fact; (b) explain to the recipient that such action may invalidate any purported acceptance by the recipient; and (c) draw the attention of the recipient to this paragraph.

Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Any person (including, without limitation, trustees, nominees or custodians) who would or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement or the Tender Form to a Restricted Jurisdiction should seek appropriate independent advice before taking any action. No action has been taken that would permit participation in the Buyback Offer or possession or distribution of this announcement in any jurisdiction where action for that purpose is required. The Buyback Offer is only open to Eligible Shareholders.

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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