ENTREPRENEUR Andrew Austin has said the North Sea has a bright future in spite of the challenges posed by the coronavirus after clinching a deal to sell a firm focused on the area for around £250 million.

The RockRose Energy business founded by Mr Austin in 2015 has received a £247.5m takeover bid from Viaro Energy, which directors have recommended shareholders accept.

The 1850p per share offer from Viaro values Mr Austin’s stake in London-based RockRose at around £66m.

The offer is pitched at a 64 per cent premium to the closing price for RockRose shares on Friday.

RockRose shares sold for 2230p in January. However, the offer sends a clear signal that Viaro sees potential in the business developed by Mr Austin although oil and gas prices have plunged since then amid the coronavirus crisis.

READ MORE: Fresh warning on scale of challenge facing North Sea amid coronaviorus crisis

RockRose has a portfolio that includes stakes in big fields off Scotland, such as Blake.

Viaro’s move provides a vote of confidence in the North Sea that will be welcomed in the area as firms face the prospect of a deep downturn. A range of North Sea firms have announced plans to slash spending in recent weeks.

Led by Italian entrepreneur Francesco Mazzagatti, Viaro has chosen RockRose as the vehicle for the move into the North Sea that it has been considering since before the coronavirus crisis erupted.

The London-based oil trading firm has secured financing from Middle Eastern investors for the RockRose acquisition.

Mr Austin said Viaro approached RockRose late in February. He is confident the resulting offer will provide a good outcome for stakeholders in RockRose.

Mr Austin rejected suggestions the decision to recommend Viaro’s offer indicated that he had lost confidence in the growth potential of RockRose amid the challenges posed by the coronavirus.

READ MORE: RockRose to ramp up spending on North Sea assets

Noting that directors of listed companies are obliged to consider offers for the firms they run, he said: “It doesn’t mean I have any lack of confidence in the North Sea, actually I think there are a lot of opportunities still out there.

“The RockRose approach remains in place and Francesco and his colleagues have bought into, which is growing in the North Sea. We’ve delivered them a pipeline and a management team that are very capable and very talented in delivering that; we will continue to see RockRose grow across the North Sea.”

Mr Austin said the deal showed other people believed in the North Sea’s potential, noting: “There’s still stuff to be done … we’re still going to need hydrocarbons for a period of time.”

He added: “There’s money to be made in the North Sea. It may well be that I come back to the North Sea.”

The deal provides vindication for Mr Austin’s decision to form a business focused on the North Sea amid the slump triggered by the sharp fall in the crude price from 2014 to 2016.

The former investment banker thought the resulting downturn would create opportunities to buy assets at attractive prices.

READ MORE: North Sea oil firm eyes more deals after bumper acquisition

Mr Austin used acquisitions to build RockRose into a significant player in the North Sea in the space of a few years. In February last year it bought the North Sea portfolio developed by America’s Marathon for around £110m.

Viaro expects to use RockRose as a platform on which to build a bigger North Sea business.

Mr Mazzagatti said: “We have ambitious growth plans in the UKCS (United Kingdom Continental Shelf) and we believe that RockRose’s producing assets, its staff …will be an ideal platform from which to grow.”

He moved into energy trading after developing a firm that exported Italian produce to the Middle East.

Viaro had $950m turnover in 2019. Its directors include Stephen Jenkins, who ran the North Sea-focused Nautical Petroleum firm that Cairn Energy bought for £414m in 2012. RockRose shares closed up 702p at 1832p.

The announcement of the proposed deal states Viaro does not intend to materially change headcount associated with RockRose’s head office functions in London, its operations in Aberdeen or other places of business.

The takeover requires approval by RockRose shareholders.

Viaro has received irrevocable undertakings to accept its offer from the holders of 35.3 per cent of the RockRose shares in issue.

Brent crude sold for around $43 per barrel yesterday, compared with about $70/bbl in January.