China’s Fosun Group Enters in Merger with Australian Oil Company
In a latest agreement, China's Fosun Group has merged with a small Australian oil company. It is the company's first venture into overseas oil and gas business.
Roc Oil on Monday said they agree to accept 474.4 million Australian dollars (US $ 441.9 million) as takeover bid from Fosun International, a Shanghai-based private conglomerate. The company in April disclosed that previously company was planning to merge with another small Australian oil producer 'Horizon Oil'.
Mike Harding, Roc Oil, Chairman, said Fosun offered a better deal. Fosun Group made a bid of 69 Australian cents per share, which was 10% more than Roc's shares last Friday and 52% more than that in April.
Fosun said taking over Roc is a profitable decision as Roc already has assets in China, which will fit into the company's goal of investing in overseas business.
Wu Fei, a Hong Kong-based energy analyst at Bocom International Securities, said, "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".
Allan Gray Australia Pty, Roc's largest shareholder, in favor of the bid, said he supports the bid unless there is a higher offer. On the other hand, Allan Gray opposed the previous agreement with Horizon and stood for Roc's investors to keep forward their views on the deal.
Horizon is expecting that Roc will end the merger with Fosun Group. They say Horizon has a sound balance-sheet with abundant cash reserves of about $100 million.
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