Ex-BP CEO's Energy Investment Vehicle Aims for $1.6B IPO

LONDON (Dow Jones Newswires), June 9, 2011

The new investment vehicle headed by financier Nathaniel Rothschild and former BP Chief Executive Tony Hayward Thursday announced plans for a London listing later this month, that could see the venture raise as much as GBP1 billion to invest in emerging market oil and gas assets.

The special purpose acquisition company, called Vallares in a nod to Rothschild's earlier commodities venture Vallar, marks Hayward's return to the spotlight less than a year after he left BP in the wake of the Deepwater Horizon disaster and Gulf of Mexico oil spill.

The June initial public offering will aim to sate investor hunger for resource stocks following the listing of giant commodities trader Glencore International last month.

Vallares, which has attracted the backing of a number of U.S. and U.K. long-only and hedge funds as well as sovereign wealth funds, will look to invest primarily in upstream oil and gas exploration and production, said Hayward.

"What we're looking to fund is an emerging market player with good resources and good assets but that has neither the capital nor capability to fully develop them, and to merge with them," said Hayward, who explained that Vallares wouldn't use the capital raised to buy assets, but would instead look to use its equity to enact mergers with emerging market firms, who would then benefit from London's access to capital and Vallares' management experience.

Hayward said Vallares was looking at a range of investment targets.

"The truth is we have a very broad base pipeline of potential ideas. It does pretty well spread the world, from South America, West Africa, Russia, the Middle East, South East Asia," said Hayward.

In addition to Hayward and Rothschild, Vallares was founded by former head of Goldman Sachs' U.K. investment banking business, Julian Metherell and Tom Daniel, who helped establish Vallar with Rothschild.

The firm's senior management team, meanwhile, includes ex-BAE Systems Group Finance Director George Rose and former Enterprise Oil CEO Sir Graham Hearne.

Hayward said he would build an operating team around him with "the necessary skills and capabilities." However, he downplayed the prospects of approaching his ex-colleagues at BP. "Where they come from will depend a little bit on the day, but I'm certainly not going to go poaching from any of my previous employers, so you don't need to worry about that," he said.

Credit Suisse Group (CS) is acting as the IPO's global co-ordinator and joint bookrunner, while J.P. Morgan Cazenove is acting as joint bookrunner and Evolution Securities is acting as co-lead manager.

Copyright (c) 2011 Dow Jones & Company, Inc.


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