Independent Oil & Gas rejects £26.6m offer from RockRose Energy

RockRose Energy has made a formal approach to buy Independent Oil and Gas for £26.6m, just days after agreeing to buy Marathon Oil's UK assets in a $140m deal.

RockRock said its 20p per share cash offer, which was made on Friday, has been rejected by the board of directors of IOG, as they want to continue looking for a strategic partner to develop their assets.

It argued that the offer would be compelling for IOG shareholders as it would allow them to realise an immediate cash upside on their shareholdings at a significant premium to the current market price. The offer would represent a 51% to the closing price of IOG on 26 February.

In an update last week, IOG said it had seen "serious" industry interest to date in its flagship Core Project. RockRose said on Tuesday it would be challenging for IOG to independently fund the field development capital expenditure of around £450m without an industry partner in light of its current market capitalisation - particularly in the current equity market conditions.

RockRose said that it has considered the opportunity to partner with IOG but that any such partnership remains "problematic" due to the financing arrangements IOG has in place with London Oil & Gas.

"RockRose believes that all IOG shareholders should be given the opportunity to consider the merits of the potential offer which would be at a more than 50% premium and made fully in cash by a credible bidder.

"Furthermore, it is, in the view of RockRose, the fiduciary duty of the IOG board to engage with RockRose immediately including providing it with access to the convertible loan documents and other documents representing other dilutive securities while the board considers, in conjunction with its advisers, the merits of the potential offer."

At 1330 GMT, IOG shares were up 29.2% to 18.25p. Rockrose shares are currently suspended on account of the ongoing transaction with Marathon Oil.