Genel Energy raises Capricorn offer to $436m, outbidding Norway’s DNO
Britain's Genel Energy raised its cash offer for Capricorn Energy to $436-million on Friday, topping a rival offer from DNO and re-securing the backing of Capricorn's board after a months-long bidding war.
Capricorn shares were up 12.2% at a more than 15-year high of 443 pence by 08:38 GMT, while Genel’s shares fell 2.1%.
Capricorn has become a prized target for energy firms seeking a foothold in Egypt’s upstream sector, with its Western Desert assets attracting competing bids from the two rivals weeks apart.
Genel secured the backing of Capricorn’s board with a $360-million bid in July, before DNO offered $396-million earlier this month.
Under the revised terms of Genel’s bid, Capricorn shareholders will receive about $5.74 per share, comprising $4.75 in cash and a $0.99 special dividend, a 10% premium to DNO’s offer.
Zeus Capital analyst Daniel Slater said that Capricorn would give Genel a much more diversified production base, larger drilling program and sources of cash flow.
Capricorn’s board withdrew its recommendation for DNO’s offer to again back Genel’s bid, saying it provides shareholders with “superior value, certainty and deliverability”.
DNO declined to comment when asked if the company would raise its offer.
Genel has secured commitments from shareholders including Palliser Capital, Newtyn Management, Kite Lake Capital and Madison Avenue Partners, locking up about 39% of Capricorn’s issued share capital.