Shareholders in Fusion Oil & Gas plc should benefit more from future exploration success if they accept a near £40 million offer from Sterling Energy plc.
The enlarged group can expect to capitalise on successes more effectively thanks to Sterling’s supportive institutional shareholder base, greater share liquidity, stronger balance sheet and additional financial resources.
This is one of the key messages for Fusion shareholders in a new document published by Sterling. It responds to Fusion’s rejection of Sterling’s bid which values each Fusion Share at 40.25p, a premium of 29% over Fusion’s market price before the approach became known.
Sterling Chairman Richard O’Toole says acceptance of the offer “will create a group with a geographically focused portfolio of production, appraisal and exploration assets and with the greater resources needed to develop and exploit them.”
The document dismisses Fusion’s claim that merging with Sterling will dilute shareholders’ interest in any exploration success. It points out that Fusion’s strategy is flawed - despite drilling six wells over three years, successes have failed to increase shareholder value.
Ten weeks have elapsed since Sterling’s approach to Fusion’s management, but no other offers have been announced, the document adds. In contrast to Fusion, Sterling has delivered steady share price growth and good liquidity, backed by increasing production revenues and a growing reserve base.
The declared 41.5% shareholder support includes 20.4% of Fusion owned by Sterling itself. It was acquired at the start of the bid from Westmount Energy Ltd, in return for Sterling shares on the same basis as the offer – 3.5 Sterling shares for each Fusion share.
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
