Roc Oil recently announced a 'merger of equals' with Horizon Oil

Intelligent Investor

Independent Financial Research

Roc Oil recently announced a 'merger of equals' with Horizon Oil. Horizon shareholders will receive Roc shares in exchange for tipping their assets into the combined group. Roc's chairman Mike Harding certainly seems excited. In an official ASX release he referred to the merger as a 'cracking deal'. But not everyone agrees, including long standing and long suffering 20% shareholder Allan Gray Limited, a large and well-respected fund manager. Under Roc Oil's constitution, and without breaching any ASX listing rules, the company doesn't require a shareholder vote to approve the transaction. If the company wanted to raise cash via a share-issue for more than 15% of its market capitalisation, it would need shareholders' nod. But more than doubling the share count in a scrip merger requires no such formalities. This is unfair. The ASX should require a vote on such 'company transforming' initiatives. After all, who owns the company? (VIEW LINK)


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