Genel Energy has rejected an unsolicited takeover approach from Norwegian rival DNO, becoming the latest London-listed company to be targeted by a foreign buyer.
DNO, which operates in the Middle East and North Sea, said it made a 69p-a-share offer for Kurdistan-focused Genel on 28 July, valuing the company at £202 million. The offer represents a 38 per cent premium to Genel's last closing price.
DNO made the proposal public after Genel rejected it on 4 August. DNO said it "remains willing to engage with the board in relation to the proposal," increasing pressure on Genel to enter takeover talks.
DNO is Genel's partner in the Tawke field in Kurdistan. Alongside the cash offer, DNO is proposing a cash-and-shares alternative of equivalent value, which it said would be funded through its own share authorities and would not require approval from DNO shareholders. Share authorities allow a company to issue new shares up to a limit already approved by investors.
Shares in Genel rose 22 per cent to 61p following the news, wiping out the stock's 17 per cent year-to-date losses.
Capricorn Energy deal in the background
Genel agreed in principle last month to buy London-listed Capricorn Energy in a deal worth £268 million, though other suitors are also circling Capricorn. DNO said its offer for Genel is not conditional on the outcome of that pursuit.
DNO said the proposal "provides certainty of value irrespective of the outcome of Genel's offer for Capricorn... which, if unsuccessful, would leave Genel without the diversification it has long sought." DNO added that combining its business with Genel's would create a significantly larger operator in Kurdistan, where "continuing security and commercial risks make scale" essential.
Separate bidding war over Pharos Energy
In a separate deal, Israeli oil firm Ratio Petroleum has raised its proposal to buy London-listed Pharos Energy, which has major operations in Egypt, trumping a rival bid from Serica Energy.
