Fosun Intl to get Roc Oil for A$474m

Billionaire Guo Guangchang's Fosun International Ltd agreed to acquire Roc Oil Co for A$474 million ($442 million) in cash, giving the Chinese group assets stretching from Australia to Malaysia.

Roc Chairman Mike Harding said Fosun's offer is superior to an agreement to merge with Horizon Oil Ltd, while Horizon said it expected Roc to terminate their A$800 million accord.

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 Co and Cnooc Ltd, was approached by two potential buyers it did not identify after 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," Wu Fei, a Hong Kong-based energy analyst at Bocom International Securities Co Ltd, said on Monday in an e-mail.

Horizon Chief Executive Officer Brent Emmett said his company may attract takeover interest based on the price Fosun agreed to pay for Roc.

Horizon holds about 27 percent of the Beibu Gulf project, a bigger stake than Roc, he said.

"That would imply a very significant valuation on Horizon Oil," Emmett said on Monday in a telephone interview. "I don't rule out there might be some takeover interest in Horizon."

While Horizon has a viable standalone business, the funding of future projects will be more challenging now, John Young, an analyst at Ord Minnett Ltd, wrote on Monday in a note.

Horizon has sufficient funds and wasn't depending on the Roc merger, Emmett said. Horizon has strong prospects in Papua New Guinea and its balance sheet is in "very sound shape", the company said on Monday in a separate statement.

Allan Gray Australia Pty, Roc's largest shareholder, will support the Fosun bid unless there's 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 telephone interview.

The bid is 52 percent more than Roc's closing price on April 23, before the Horizon deal was announced.