Fosun beats out Australian firm to buy Roc Oil

Hong Kong-listed investment firm enters into a conditional agreement to acquire Australia's Roc Oil after ending a merger bid by Horizon

PUBLISHED : Monday, 04 August, 2014, 10:29am
UPDATED : Tuesday, 05 August, 2014, 5:03am

Fosun International entered into a conditional agreement yesterday to fully acquire Roc Oil, an Australian-listed oil and gas company, for A$474 million (HK$3.42 billion).

The Hong Kong-listed, Shanghai-based investment firm fended off a proposed merger between Roc and Horizon Oil, another Australian company, Fosun and Roc said.

Fosun agreed to pay 69 Australian cents cash for each Roc share, which is a 10 per cent premium to the stock's close on Friday and implies a market capitalisation of A$474 million.

The offer will remain open for at least one month, requires the approval of the Australian government and is conditional on the end of the merger agreement between Roc and Horizon, Fosun said.

Fosun's "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", Roc chairman Mike Harding said.

Fosun's acquisition came after Roc announced on July 10 and June 25 that it had two unsolicited, confidential proposals from unnamed parties to fully acquire the Australian firm.

In April, Roc announced it had entered into a tentative agreement to merge with Horizon, which would create a combined company with a market capitalisation of A$800 million.

On June 16, Roc said in a letter to shareholders that its biggest shareholder, Australian fund management firm Allan Gray, called an extraordinary general meeting to frustrate Roc's merger with Horizon.

Roc asked its shareholders to vote against Allan Gray's proposal at the meeting on July 11, saying the blocking of the merger was "clearly not in the best interests of the shareholders".

Allay Gray proposed a motion at the meeting to change Roc's constitution, in a bid to prevent the merger. The motion failed, having gained 53.24 per cent of the votes - short of the 75 per cent needed to pass.

Roc has about 180 employees in Australia, China and Malaysia. The firm's net profit fell to US$45.2 million last year from US$61 million in 2012.

Fosun said the reason for the company going into the proposed transaction was to allow "the group to enter the upstream oil and gas industry and acquire oil and gas assets".

The acquisition would be Fosun's first direct investment in the oil and gas industry and sixth overseas deal since May.

Its recent investments were in Portuguese insurance firms and German fashion retailer Tom Tailor.