There is a fresh twist to the contest for Capricorn, the Egypt-focused oil company, which has received a higher recommended bid from DNO that looks to have derailed Genel Energy’s agreed takeover of Capricorn Energy.
DNO said it would pay US$5.214 a share for Capricorn, made up US$4.224 in cash plus a special dividend of US$0.99, valuing the company at around US$396m (£292m).
In sterling terms, the 384p-a-share offer is a 45% premium to Capricorn’s undisturbed price in March, and is about 10% above the rival offer from Genel.
The bid comes just days after Capricorn shareholders voted in favour of Genel’s deal on 18 August. Capricorn’s board, advised by Canaccord Genuity, has switched its recommendation to DNO.
For DNO, the deal is a fast-tracked entry into Egypt, which it wants to develop as a third core region alongside its North Sea and Kurdistan operations, drawn by Capricorn’s producing assets in the Western Desert and its in-country team.
More broadly, the deal is part of DNO’s wider ambitions in the region. DNO is separately pursuing Genel itself, having approached that company’s board in July, and faces a 4 September deadline to make a firm offer for Genel or walk away. Buying Capricorn separately may speed up the combination of all companies.
Commenting on the Acquisition, Bijan Mossavar-Rahmani, Executive Chairman of DNO, said: “Today marks an exciting chapter in DNO’s 55 year growth story as we move to acquire a high quality portfolio of oil and gas assets in Egypt.
“Capricorn will add another business with scale, cashflow and growability to our existing operations in Kurdistan and the North Sea. With three core areas, each with its own geology, geography and geopolitics, DNO will be a more diversified and stronger company.
“DNO has ambitious plans to build a significant Egyptian business through investment in Capricorn’s portfolio, participation in new license rounds and additional acquisitions. DNO’s technical capability, financial strength and can-do attitude will fuel that growth.”