The value of Serica Energy surged yesterday after it rebuffed a takeover bid from a smaller rival.
Shares in the North Sea-focused gas producer climbed 14.1% to 348p after it emerged Kistos, a firm led by oil and gas entrepreneur Andrew Austin, approached Serica’s board with a cash and share offer that valued the group at just over £1billion.
The offer, which equated to 382p per Serica share, was a 25% premium to the company’s closing price the day before the bid was revealed.
A combined business would have production equivalent to about 40,000 barrels of oil per day, making it one of the bigger UK-focused independents listed in London.
Kistos said that it wanted to allow Serica shareholders to “make their views known” and was hopeful of having further discussions with the company.
It is offering 0.29 new Kistos shares plus 246p per share in cash. Under the deal, shareholders in each company would hold about 50% of the enlarged group.
Kistos claimed that the Serica board had acknowledged the “industrial logic” of the deal but in June had rejected the terms.
'Better together' claim
Serica said that it was considering its position and it advised shareholders not to take any action. The proposed terms of the merger are the same as those in an indicative offer previously rejected.
Serica, founded in 2004, is an independent oil and gas exploration company focused on production in the North Sea. More than 85% of its production is natural gas and the company’s operated North Sea assets provide more than 5% of the UK’s gas production.
Andrew Austin, executive chairman of Kistos, said in an online presentation that the two businesses would be “better together”. He said the combined entity could have a market capitalisation of about £1.8billion.
Serica has a market value of £940million, while Kistos’s stock rose 5.2% to 487p yesterday, valuing it at about £400million.