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Fuson International enters oil and gas sector and trumps Horizon in Roc take-over bid

04th August 2014

Fosun International, China’s largest privately-owned conglomerate, has entered the oil and gas market with a USD 441m bid for Australia’s Roc Oil

Fuson International enters oil and gas industry and trumps Horizon in Roc take-over bid
Fosun has assets in many different industries, both within China and internationally, but this is its first move into the oil and gas market

Roc had been in negotiation for an all-stock deal to merge with compatriot Horizon Oil but Fuson seems to have trumped Horizon with the signing today of a Bid Implementation Agreement (BIA) with Roc, under which Fuson will acquire all of the Roc shares currently on issue for AUD 0.69 cash per share by way of off-market takeover offers.

Fuson will only follow through on the bid as long as the Horizon merger deal is cancelled.

The Fuson-Roc deal equates to AUD 474m, or USD 441m.

Roc’s total oil production last year stood at 2.7 mmboe – making USD 45.2m net profit.

If the deal goes through, Fuson will control all of Roc’s existing operations spread across China, Malaysia and Australia.

Fosun has assets in many different industries, both within China and internationally, but this is its first move into the oil and gas market.

"The proposal to purchase all of Roc’s shares for cash is superior when considered against the alternative merger of equals with Horizon and offers a significant premium to share price performance,” said Mike Harding, Roc chairman.

“In reaching our conclusion that the Fosun offer is in the best interests of shareholders and a superior proposal as defined in the Horizon Merger Implementation Deed, the board has considered a number of alternatives, including the standalone value of Roc and the value of pursuing a merger with Horizon in accordance with its proposed terms.

“This cash offer price is consistent with the valuation ranges provided by the independent experts’ reports produced for the Horizon merger. Following assessment of the available information and alternatives, the board has unanimously concluded that the offer is a superior option and a low risk route to maximise immediate value for our shareholders."

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