Vitol sells 16pc stake in Viva Energy through block trade

Viva is awaiting approval for its acquisition of the On The Run chain. Picture: Ben Clark

The world’s largest energy trader, Vitol, was selling a 16.1 per cent stake in Viva Energy in a $714m deal being handled by Bank of America and UBS on Tuesday night

There were 248.6 million securities being offered to investors at $2.87 each – a 2 per cent discount to the last closing price and a 9 per cent discount to the closing price on September 11 of $3.16.

The trade is fully underwritten and will result in Vitol retaining a 30 per cent stake in the company.

A term sheet sent to investors said Vitol had not previously sold any securities in Viva Energy since its initial public offering more than five years ago in July 2018 and Vitol has confirmed that it has no intention to further reduce its securityholding in the short to medium term.

Vitol is the world’s largest independent oil trader and listed the business at $2.50 per share.

It purchased Viva Energy in 2014.

“It considers Viva Energy to be a one of the very best downstream retail companies in the world, managed by an exceptional team led by CEO Scott Wyatt,” a term sheet said.

Brokers on the deal will make 0.15 per cent in commission.

Shares in Viva Energy gained earlier this year and have been relatively stable since, but on Tuesday they plunged almost 9 per cent on speculation that a block trade by Vitol could be looming before closing down 7 per cent to $2.93.

Global groups like Vitol frequently look to redeploy funds elsewhere in their global portfolios, a source said.

Viva is in the process of awaiting competition clearance for its $1.15bn acquisition of rival On The Run.

The Swiss Dutch multinational energy and commodity trading company Vitol generated $US505bn of revenue in 2022, making it the largest oil trader in the world.

It is a company privately held by about 400 partners who are current and former employees.

It operates in the areas of trading, terminals and infrastructure, refining, exploration and production, aviation, power and renewables.

The deal comes hot on the heels of the 7 per cent selldown by Auckland Council of the Australian and New Zealand listed Auckland Airport.

UBS sold a stake worth about $NZ800m on behalf of the council last month.

A handful of industry and pension funds were pre-allocated $300m worth of shares at $8.12 – a 3.8 per cent premium to their last closing price.

Following the sale, the council retains 11 per cent in the airport.

However, unlike the Vitol trade, the airport sale had been anticipated for months.

A number of private equity firms still own major stakes in companies they listed during the global pandemic, but many are not trading strongly enough for an exit to be attractive for the vendors. Another major block trade that could come at some stage is Woolworths’ 9 per cent holding it retains in pubs an liquor spin-off Endeavour Group