Roc Oil backs Fosun offer

Board recommends cash offer over proposed merger with Horizon.

Roc Oil (ROC) has recommended a $474 million takeover offer from Chinese giant Fosun International that values the group at a premium, saying the bid is a better deal for shareholders than the proposed merger with Sydney based junior, Horizon Oil.

Horizon shares dropped in response to the news, slipping 8.11% to 34c at 10.28am (AEST), against a 0.16% benchmark index fall. Roc shares were unchanged at 63c. 

The cash offer of 69c per share is a 52% premium to the price of Roc shares before the Horizon merger proposal was announced, and a 25 per cent premium to the three month volume weighted average price.

The deal requires more than 50% of shareholders to accept the offer and is also subject to approval from the Foreign Investment Review Board.

Roc chairman Mike Harding said the offer price was consistent with the valuation provided by the independent experts for the Horizon deal.