Horizon Oil has called on Roc Oil Company to terminate their merger agreement after board members at Roc unanimously recommended a takeover from Fosun International.
Horizon and Roc had signed a merger implementation agreement in April this year, but the $474 million bid from Fosun, a privately owned Chinese conglomerate, was accepted by Roc’s board this morning .
Roc operates the Cliff Head offshore oilfield in the Perth Basin.
Horizon managing director Brent Emmett said that he wished Roc well.
"While the board of Horizon Oil saw significant value potential in creating what we considered would be a leading Asian mid-cap E&P company, we note and respect Roc's decision to be acquired for cash, as a low-risk means of achieving immediate value for its assets, bringing an end to Roc's 15-year history as an ASX listed oil and gas company,” he said.
Mr Emmett believed the Beibu fields, offshore from China and partially owned by Roc, Horizon and other interests, were a key focus for Fosun.
"We believe the price being paid by Fosun for Roc is consistent with a high valuation for Beibu, given that Roc’s independent expert’s report classifies Roc’s 20 per cent interest in Beibu as the most valuable asset of Roc’s portfolio, by a large margin," Mr Emmett said.
Horizon recently partially sold its interests in Papua New Guinea to Osaka Gas for $204 million, and claims its balance sheet is in “very sound shape” with cash reserves of around $US100 million.
"We believe we are well positioned to create material value from our focused approach to E&P opportunities in the Asia Pacific region," Mr Emmett said.
Horizon closed down 6.8 per cent to 34.5 cents per share, whilst Roc was up 7.5 per cent to 67.7 cents.
Fosun is offering 69 cents per share to Roc shareholders.
