Neptune Is Said to Consider Merger with Rival

Neptune Is Said to Consider Merger with Rival
Neptune Energy Group is considering options including a merger with Harbour Energy that could create one of Europe's largest independent oil and gas companies, people familiar with the matter said.

(Bloomberg) -- Neptune Energy Group Ltd., the private equity-backed explorer, is considering options including a merger with Harbour Energy Plc that could create one of Europe’s largest independent oil and gas companies, people familiar with the matter said. 

Neptune, part-owned by Carlyle Group Inc. and CVC Capital Partners, is working with an adviser as it studies a potential combination with London-listed Harbour, according to the people. Any deal could value the combined business at $10 billion or more, the people said, asking not to be identified as the information is private. 

Harbour shares jumped as much as 7.2% in U.K. trading on Tuesday. They were up 4.5% at 1:50 p.m. in London, giving the company a market value of 3.6 billion pounds ($5 billion). Neptune is also working with advisers to consider other possibilities including an initial public offering or outright sale, the people said. 

Deliberations are in the early stages, and Neptune hasn’t made any final decisions about which path to pursue, the people said. The company could also choose to remain independent, the people said. Representatives for Neptune and Harbour declined to comment. 

A combination of Neptune and Harbour would unite two of the largest independent energy explorers with significant assets in the U.K. North Sea as well as emerging markets such as North Africa and Southeast Asia. Harbour emerged from the combination of North Sea producers Premier Oil Plc and Chrysaor Holdings Ltd. 

Chief Executive Officer Linda Cook said in April that Harbour was studying potential acquisition opportunities as it seeks “at least one more region” offering a substantial resource base. 

Neptune Growth

Neptune was formed in 2015 by former Centrica Plc boss Sam Laidlaw with funding from Carlyle and CVC. The firm, while present in the U.K., has a more widespread portfolio of assets. 

It has grown through a series of acquisitions, including the purchase of Engie SA’s exploration and production arm in 2018. That deal saw sovereign wealth fund China Investment Corp. become Neptune’s biggest shareholder. 

Neptune has been working with financial adviser Rothschild & Co. to explore potential options including an IPO that could value the business at more than $5 billion, people familiar with the matter said in May. 

--With assistance from Elena Mazneva.

© 2021 Bloomberg L.P.


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