Explorers San Leon and Aurelian agree £150m all-share merger

OIL AND gas explorer San Leon Energy is to acquire fellow Aim-listed explorer Aurelian in an all-share merger worth around £150m.

Under the terms of the tie-up – which represents a “compelling strategic and cultural fit” according to the boards of both companies – shareholders will receive 1.3 new San Leon shares for each Aurelian share.

Existing Aurelian shareholders will hold approximately 34 per cent of the enlarged company, and San Leon shareholders will hold 66 per cent.

Both firms hold significant acreage positions in Poland, and the enlarged group will become the largest foreign acreage holder in the Eastern European country, both firms said yesterday.

The enlarged group will also have assets in Morocco and Albania.

Oisin Fanning, executive chairman at San Leon, is lined up to take the same role in the merged group. San Leon’s Paul Sullivan will be appointed managing director and John Buggenhagen will become exploration director.

Upon completion of the merger, five directors – including chief executive Rowan Bainbridge – will step down from Aurelian.

Oisin Fanning said yesterday: “The combination of cash resources and the Polish asset base alone creates an obvious and exciting opportunity to realise substantial growth.

“Both management teams have built up a tremendous amount of experience and we can now employ that to pursue a best-of-portfolio near term value creation strategy.”

Shares in San Leon closed 12.83 per cent down at 8.36p and shares in Aurelian closed 6.82 per cent down at 10.25p, as investors reacted negatively to news of the merger.

ADVISERS WESTHOUSE SECURITIES

ANTONIO BOSSI
WESTHOUSE SECURITIES

RICHARD JOHNSON
WESTHOUSE SECURITIES

Westhouse Securities is the nominated adviser to San Leon Energy, having taken on the role when Westhouse bought Arbuthnot’s investment banking arm earlier this year. Richard Johnson and Antonio Bossi, both directors of corporate finance at Westhouse, are leading the bank’s team.

Bossi joined Arbuthnot in 2003, and has over 16 years of M&A and capital markets experience. He has advised FKI, BICC General Cable, Clarity Commerce, GE, Tyco International on a number of cross-border and public UK transactions and on their European expansion plans. Antonio’s current quoted clients include SQS Software Quality Systems, Northbridge Industrial Services, EIIB, Andes Energia, Sound Oil and Quadrise Fuels.

Johnson joined Greig Middleton & Co in 1996, which became Arbuthnot before turning into Westhouse.

He has 16 years of corporate finance experience and has transacted across a wide range of sectors including oil and gas, technology, logistics and financial services.

His current clients include Pan European Terminals, Gresham House, Daniel Stewart, Goodwin and Cardiff Property.

Fox-Davies Capital was financial adviser on the deal and joint broker to San Leon, with Susan Walker and Daniel Fox-Davies leading the team over there.

Greenhill & Co, Oriel Securities, RFC Ambrian also had roles on the deal.