Sterling Energy plc has announced it will not increase its offer to acquire Fusion Oil & Gas plc.
Sterling Chairman Richard O’Toole said in a letter to Fusion shareholders that after 15 weeks Sterling’s offer is still the only one available.
He added that following a decision by the US oil company Amerada Hess to walk away from two partnership agreements with Fusion in West Africa, there is a question mark over Fusion’s ability to extract value from the projects on its own. Mr O’Toole said that according to Fusion’s former broker, Investec, the involvement of Amerada represented approximately half of Fusion’s core net asset value.
Mr O’Toole said: “Based on Fusion’s own valuation report these licences would have been worth over $500 million to Amerada Hess. Why would they walk away from such great future value?”
Under Takeover Panel rules, Sterling is now not allowed to raise its offer unless a competing offer is made. Fusion shareholders who have not already accepted must decide whether to do so by that date.
Sterling is offering 3.5 Sterling shares for each Fusion share, or a partial cash alternative of 2.5 Sterling shares plus 10p for each Fusion share.
Sterling has received acceptances from shareholders holding 27.4% of Fusion’s issued share capital, including Fusion’s largest institutional shareholders. Sterling already owns 19.9% of Fusion, and is its largest shareholder.
Mr O’Toole said: “Fusion has continually clung on to the possibility of an alternative offer. None has materialised in the 15 weeks since we approached the Fusion board.”
He added: “We now have acceptances that give us a 47.3% interest in Fusion, and are confident of gaining a majority interest ahead of the December 4 deadline.”
For further information contact:
Harry Wilson, Chief Executive
Sterling Energy plc: 01582 462 121
Graeme Thomson, Finance Director
Sterling Energy plc: 01582 462 121
Allan Piper, First City Financial Public Relations: 020 7436 7486
Chris Callaway, Evolution Beeson Gregory: 020 7071 4309
www.sterlingenergyplc.com
Ticker Symbol: SEY
