Genel Energy, an oil producer with production assets in the Kurdistan Region of Iraq, has increased its recommended cash offer for Edinburgh-headquartered Capricorn Energy, topping a rival offer from DNO.
Under the terms announced on 25 September, Capricorn shareholders would receive US$5.74 for each share. This comprises US$4.75 in cash and a special dividend of US$0.99, expected to be declared before the deal takes effect.
Assuming the dividend is paid in full, the offer implies a value of about US$436 million for Capricorn on a fully diluted basis, equivalent to £330 million. It is US$0.53 a share, or about 10 per cent, more than DNO’s offer of US$5.214, which was first announced on 1 September and revised on 17 September.
Capricorn is a Scottish public limited company headquartered in Edinburgh and has been listed on the Main Market of the London Stock Exchange for more than 30 years. The deal is to be carried out through a Scottish scheme of arrangement.
The company’s recent North Sea presence centred on exploration and the Catcher and Kraken developments, which began production in 2017 and were sold in November 2021. It drilled the Jaws and Diadem exploration wells in 2022 and has since focused on business development in the region. Its core operations are now in Egypt’s Western Desert.
The announcement said the increased offer does not change the bidder’s intentions for Capricorn’s business, including the locations of its operations, and its management and employees, as set out in July’s scheme document.
Capricorn’s directors, advised by Canaccord Genuity, consider the terms fair and reasonable and have withdrawn their recommendation of the DNO offer. They said they believe the increased offer “provides Capricorn Shareholders with superior value, certainty and deliverability relative to the DNO Offer”.
The DNO offer has not lapsed, but the directors intend to adjourn the shareholder meetings on it set for 16 October.
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Genel’s original offer, announced on 2 July, was backed by more than 99 per cent of the Capricorn shares voted at meetings on 18 August. Shareholders with about 39.1 per cent of the shares have now given revised undertakings to vote against or not accept any other offer.
Egypt’s competition authority approved the deal on 7 September, leaving one further Egyptian regulatory condition outstanding. The deal is expected to take effect in the fourth quarter of 2026.
