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Neptune Energy reportedly mulling £7bn IPO

·2-min read
Chief Executive of Centrica, who own British Gas, Sam Laidlaw addresses a committee of MPs at a meeting of the Business and Enterprise Select Committee, which is questioning the companies' bosses as part of an enquiry into energy prices.
Neptune executive chairman Sam Laidlaw addresses a committee of MPs at a meeting of the Business and Enterprise Select Committee. Photo: PA

The bosses of oil and gas company Neptune Energy are mulling a £7bn ($9.9bn) IPO.

According to reports earlier in the week by Bloomberg and today by The Sunday Times, energy industry veteran Sam Laidlaw is exploring going public. 

The Times said the company was in talks with investment bank JPMorgan (JPM) and Bloomberg touted Rothschild for the float. 

Laidlaw is a stalwart of the market having previously headed up FTSE 250 (^FTMC) Centrica (CNA.L) which owns British Gas. He led the company between July 2006 and December 2014.

Neptune was founded in 2015 and relied on private equity backing from the likes of CVC and Carlyle. It operates across Europe, North Africa and the Asia Pacific region. 

One of the company's main backers is the China Investment Corporation, which owns 49%. 

The IPO would be a bet on recovering energy markets, which have seen severe turbulence over the last year due to the coronavirus pandemic. It is also a bet on loyalty to oil and gas amid ambitious UK targets to reach net-zero emissions by 2050. 

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Neptune has clocked strong returns over the last few years, with $3.5bn cash flow and $800m in dividends since 2018. It is also entering a period of production growth of between 30% and 40%.

Around around 13% of its production is in the UK so it is not a given that it would list on London markets, despite being headquartered there. The Netherlands, where Royal Dutch Shell (RDSB.L) is dual listed, could also be an attractive option.

Other options for growth such as mergers and acquisitions (M&A) are also on the table. 

Neptune Energy declined Yahoo Finance requests to comment.

Watch: What are SPACs?

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