UK oil and fuel firm Serica Energy has rejected a daring cash-and-shares supply valued at greater than £1bn from a smaller rival led by the North Sea dealmaker Andrew Austin.
Kistos, arrange by Austin in 2020 after promoting his earlier firm RockRose Energy for £250mn, stated on Tuesday that it first approached Serica in May concerning the deserves of becoming a member of the 2 North Sea-focused firms however had repeatedly been rebuffed.
It has now gone public with its newest money and shares supply, valued at 382p per share, within the hope that Serica shareholders will encourage its board to have interaction in “constructive discussions” with Kistos concerning the proposed mixture.
Under the phrases of Kistos’s supply, Serica shareholders would obtain 0.2932 new Kistos shares plus money of 246p for every of their present shares. The supply represents a 25 per cent premium to Serica’s closing value of 305p on Monday.
Serica shares rose almost 12 per cent in early Tuesday buying and selling in London to 340p whereas these in Kistos edged up 0.5 per cent to 465p. Serica’s share value has suffered just lately after the UK authorities in May launched a 25 per cent windfall tax on oil and fuel producers’ earnings, which raised their headline price from 40 per cent to 65 per cent.
Kistos, which has a market capitalisation of £384mn versus Serica’s £829mn, stated a mixture of the 2 firms would create a “leading independent North Sea champion” that might act as a consolidator within the area.
It stated Serica’s board had tabled its personal counter supply for Kistos in the beginning of July valued at 483p per Kistos share however this represented a premium of solely 4 per cent on the corporate’s share value on the time and was rejected.
There has been a big altering of the guard within the North Sea since 2014 when quite a few oil majors and utilities retreated or offered down their portfolios to deal with decrease price areas elsewhere, or to spend money on clear power applied sciences.
Since floating in London at 100p a share in November 2020, Kistos has already made two acquisitions in UK and Dutch waters, the most recent being a $125mn-plus deal for a 20 per cent stake in a bunch of gasfields north-west of the Shetland Islands from the French main TotalEnergies. Kistos’s shares have been buying and selling earlier than the supply for Serica was disclosed on Tuesday morning at 460p.
Kistos believes a mixed group would acquire admission to London’s FTSE 250 index.