Viaro Energy, a subsidiary of the commodities trading firm Viaro, has launched a takeover bid for the North Sea-focused oil and gas company RockRose Energy.
Viaro is offering 1,850 pence in cash for each RockRose share, which is a premium of 91 percent to the volume-weighted average closing price of 970 pence per RockRose Share for the three-month period ending on July 3, 2020.
The offer values RockRose at £247,5 million (around USD 308,8 million).
The RockRose directors consider the terms of the acquisition to be "fair and reasonable," and plan to advise its shareholders to accept it.
Apart from the RockRose directors' endorsement of the offer, Viaro has already secured support from five RockRose shareholders, meaning it currently has endorsements from owners of 33.3 percent of RockRose shares.
Viaro said that, as the move represented its first acquisition in the UK North Sea, the company plans to "seek continuity through maintaining RockRose's existing business plan."
RockRose's plan is to focus on increasing the decommissioning half-life of its assets and to look for opportunities to extend the life of key infrastructure, either through identifying additional development opportunities or third-party business.
"Given the Wider Viaro Energy Group's extensive knowledge in the commodities marketing and trading sectors, it expects to leverage its expertise to complement management," Viaro said.
Andrew Austin, Executive Chairman of RockRose, said: "After careful reflection, the Board of RockRose has concluded that accepting this offer is firmly in the best interests of our shareholders. It has been an exciting journey since RockRose was founded five years ago. However, for the benefit of all stakeholders, now is the time to move on and allow RockRose to continue to flourish with new backers."
Commenting on the Acquisition, Francesco Mazzagatti, CEO of Viaro Energy, said: "I am very pleased that the Board of RockRose has recommended our offer for RockRose. We have ambitious growth plans in the UKCS and we believe that RockRose's producing assets, its staff, its commitment to health and safety, the environment and best in class operational procedures, will be an ideal platform from which to grow our presence in the UKCS. I'm extremely pleased that RockRose's senior management team has agreed to join us as they share our vision for future growth."
Viaro also said that there would be no material headcount reductions among existing employees including employees in head office functions "as RockRose's employees are considered to be critical to the long term success of RockRose as part of the Viaro Energy Group."
RockRose will continue to operate as a standalone business group.
While, Viaro Energy plans carry out review of head office locations with a view to combining head office functions within a single London-based office, it does not intend to materially change headcount associated with RockRose's head office functions in London, its operations in Aberdeen or other places of business.