Billionaire Guo Guangchang’s Fosun International agreed to acquire Roc Oil for $441million in cash, giving the Chinese group assets stretching from Australia to Malaysia.
Shanghai-based Fosun is offering 69 cents a share, 10% more than Roc’s last closing price, the Sydney-based company said in a statement. The bid depends on Roc ending plans to combine with rival Horizon Oil.
Guo’s Fosun, the investment arm of China’s biggest closely held industrial group, has been on a buying spree, ranging from insurance businesses to New York City office buildings.
Roc, owner of stakes in projects backed by PetroChina and China National Offshore Oil Corporation (CNOOC), had received two approaches from potential buyers it did not name since announcing the Horizon merger in April.
Fosun will get assets in China’s Bohai Bay and Beibu Gulf, “providing stable upstream income and a learning ground for further exploration in the region as China moves more into offshore production,” said Wu Fei, a Hong Kong-based energy analyst at Bocom International Securities.
“The board has unanimously concluded that the offer is a superior option” to the planned $745million Horizon merger, Roc Chairman Mike Harding said in the statement.
Horizon expects Roc to end the merger, according to a separate statement. Horizon has strong prospects in Papua New Guinea and its balance sheet is in “very sound shape” with cash reserves of about $100million at the end of June, it said.
Allan Gray Australia, Roc’s largest shareholder, supports the Fosun bid unless there is a higher offer, said Simon Mawhinney, a portfolio manager at the firm in Sydney. Allan Gray had opposed the Horizon accord and fought unsuccessfully for Roc investors to get a vote on the deal.
“Considering the choices available to us, this is a much, much better outcome and significantly closer to a fair price,” Mawhinney said in a phone interview.
The bid is 52% more than Roc’s closing price of 45.5 cents on April 23, before the Horizon deal was announced.
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