South Korean trading firm Samsung C&T (000830.KS) said on Monday it was considering taking over independent U.S. oil firm Parallel Petroleum, which a media report said might be worth about $920 million.
We are actively pursuing oil, natural gas and mineral resource business...and reviewing various resource deals across the globe but no final decision has been made on Parallel Petroleum, Samsung C&T said in a statement.
Earlier on Monday a report by online news outlet Money Today said Samsung was seeking to buy the U.S. firm, which is owned by private equity group Apollo Global Management (APO.N), for an estimated 1 trillion won ($919.6 million).
Parallel, based in Midland, Texas, develops and invests in long-lived oil and natural gas fields in West Texas and New Mexico, including a shale gas project near Forth Worth.
The move comes as the pace of global resource deals has picked up in recent weeks, putting the sector on track to top a record $120 billion in transactions this year, Ernst & Young predicts.
DOUBLING ITS INVESTMENT
Resource deals are being fueled by companies anxious to deploy the spoils from booming commodity markets, with some being forced to move into new sectors or regions, as the number of top-tier assets available grows thin.
Apollo, the buyout firm led by Leon Black, would double its investment in Parallel, which it bought in 2009 for about $483 million.
The New York-based firm had $71.7 billion of assets under management at the end of June, $40.4 billion of that in private equity funds, $23.7 billion in capital markets funds and $7.6 billion in real state. Apollo had $9.9 billion in uncalled private equity commitments, or money set aside for future investments.
Shares in Samsung C&T closed down 2 percent, in line with the broader market .KS11.
Samsung C&T has hired JPMorgan Chase & Co (JPM.N) to advise on its overseas resource deals, a Samsung spokesman said.
($1 = 1087.450 won)