Management Resource Solutions Share News (MRS)

Oil and gas group Petroceltic International has launch a recommended bid for its sector peer Melrose Resources, which has assets in Egypt and Bulgaria.Under the deal, which would double AIM-listed Petroceltic's operations, Melrose shareholders will receive 17.6 new Petrolceltic shares for every Melrose share.In addition, a special dividend of 4.7p per share will be paid, valuing each Melrose share at 143.9p each and the entire issued share capital of the company at about £165.0m, representing a premium of around 6.2% to the closing price of 135.5p on August 16th, the last business day before the announcement. Once the merger takes place Melrose shareholders will hold 46% of the enlarged company and Petrolceltic sharesholders will holding the remaining 54%. The englarged group will have combined proven and probable reserves of 84m barrels of oil equivalent, with the focus remaining on north Africa, the Mediterranean and the Black sea. Brian O'Cathain, Chief Executive of Petroceltic said: "A combination with Melrose is a compelling opportunity to create a regionally focused company, balanced between production, development and exploration. The benefits extend beyond the improved risk profile to the combined entity's enhanced strategic and funding options allowing the potential value of the assets of both companies to be realised for their shareholders."According the FT, O'Cathain said the deal will combine the companies' respespective strength, with Petroceltic being more skilled in exploration and business development, while Melrose is more petroleum engineering development-focused. The board of the enlarged group will be made up of O'Cathain as Chief Executive, Tom Hickey, the Corporate Development Director at Petroceltic as Chief Financial Officer, and David Thomas, the Chief Executive of Melrose as Chief Operating Officer. Robert Adair, Executive Chairman of Melrose added: "The merger represents an exciting opportunity for all shareholders and will create an E&P company with a strong regional focus and the scale to compete successfully in this arena. The enlarged group will have a strong, highly experienced management team with a good blend of operating skills to maximise the value of these assets and pursue additional business development opportunities. "The Melrose board believes that the Merger will provide access to material resources in a leading gas development and an exposure to a more diverse exploration portfolio, enhancing the longer term outlook for the business."Melrose shares rose 0.37% to 136p, while shares were down 7.65% at 7.55p by midday. NR