Serica Energy rejected a revised merger proposal valuing it at nearly 1.2 billion pounds (US$1.4 billion) from energy investment firm Kistos, saying it undervalues the British oil and gas group’s core assets.
Kistos on July 25 disclosed details of the proposal, which comprised a cash-and-stock offer of 425 pence per share, representing a 19% premium to Serica’s last closing price.
It also proposed that Tony Craven Walker, Serica’s chairman, take on the same role at the combined firm, and that Andrew Austin, Kistos’ chairman, assume the role of CEO.
The offer “results in Serica shareholders funding much of the purported premium themselves: Kistos' market capitalization is significantly smaller than Serica’s,” Serica, which produces around 5% of Britain's gas supplies, said.
“The [Serica] board reiterates its position that it will not recommend any deal on terms which it believes are unattractive to its shareholders and wider stakeholders.”
Kistos, which has a market value of 439.2 million pounds compared with Serica’s 970.8 million, had earlier made public an offer of 382p for each share of Serica, which was rejected by the firm’s board in June.
Serica then approached Kistos on July 1 with a cash-and-stock offer of 483p per Kistos share, which was rejected by the investment company’s board.
The July 25 announcement comes as a blow to Kistos as it looks to strengthen its foothold in the North Sea.
Shares in Kistos fell 2.8%, while Serica was trading 1.8% higher.
(US$1 = 0.8356 pounds)
Recommended Reading
Chevron’s Tengiz Oil Field Operations Start Up in Kazakhstan
2024-04-25 - The final phase of Chevron’s project will produce about 260,000 bbl/d.
Rhino Taps Halliburton for Namibia Well Work
2024-04-24 - Halliburton’s deepwater integrated multi-well construction contract for a block in the Orange Basin starts later this year.
Halliburton’s Low-key M&A Strategy Remains Unchanged
2024-04-23 - Halliburton CEO Jeff Miller says expected organic growth generates more shareholder value than following consolidation trends, such as chief rival SLB’s plans to buy ChampionX.
Deepwater Roundup 2024: Americas
2024-04-23 - The final part of Hart Energy E&P’s Deepwater Roundup focuses on projects coming online in the Americas from 2023 until the end of the decade.
Ohio Utica’s Ascent Resources Credit Rep Rises on Production, Cash Flow
2024-04-23 - Ascent Resources received a positive outlook from Fitch Ratings as the company has grown into Ohio’s No. 1 gas and No. 2 Utica oil producer, according to state data.