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
Defeating the ‘Four Horsemen’ of Flow Assurance
2024-04-18 - Service companies combine processes and techniques to mitigate the impact of paraffin, asphaltenes, hydrates and scale on production—and keep the cash flowing.
Exclusive: Silixa’s Distributed Fiber Optics Solutions for E&Ps
2024-03-19 - Todd Chuckry, business development manager for Silixa, highlights the company's DScover and Carina platforms to help oil and gas operators fully understand their fiber optics treatments from start to finish in this Hart Energy Exclusive.
CERAWeek: AI, Energy Industry Meet at Scary but Exciting Crossroads
2024-03-19 - From optimizing assets to enabling interoperability, digital technology works best through collaboration.
Cyber-informed Engineering Can Fortify OT Security
2024-03-12 - Ransomware is still a top threat in cybersecurity even as hacktivist attacks trend up, and the oil and gas sector must address both to maintain operational security.
Forum Energy Signs MOU to Develop Electric ROV Thrusters
2024-03-13 - The electric thrusters for ROV systems will undergo extensive tests by Forum Energy Technologies and SAFEEN Survey & Subsea Services.