Roc Oil (ROC) and Horizon Oil (HZN) have announced plans for an all-scrip merger which would create a new company with a market capitalisation of $800 million.
The merger of equals, which would see Horizon shareholders take 0.724 Roc shares for each Horizon share, has unanimous support from both company’s boards in the absence of a superior proposal.
Roc shareholders will hold around 42% of the new entity, while Horizon shareholders will own around 58%, in line with the groups' 10-day volume weighted share prices to April 23.
The merger, which is expected to be completed by August, would consolidate “highly complementary” Asian focussed portfolios centred on China, Malaysia, Papua New Guinea and New Zealand and containing net proved and probable reserves of 36.9 million barrels of oil equivalent, according to the groups’ investor presentation.
Horizon chief executive Brett Emmett is set to become chief executive and managing director of the group, with Roc chairman Mike Harding to chair the board, comprising an additional three current non-executive Roc directors and four non-executive Horizon directors. Current Roc chief executive Alan Linn will act as president of Roc Oil Malaysia until April 2015.
The deal remains conditional on completion of Horizon’s Osaka Gas Asset Sale agreement, no adverse change in either group and regulatory and shareholder approval.