Serica Energy plc said the merger offer from smaller rival Kistos plc would “negatively impact” the combined entity’s balance sheet and growth potential.
OPPORTUNISTIC
In a detailed statement issued today, the company listed reasons why it had rejected the Kistos offer.
Serica said it would be “materially undervalued” and that the proposed merger would not be in the interests of its shareholders and other stakeholders.
The company added that the Kistos proposal was an “opportunistic reaction” to the recent disconnect in gas prices between the UK and Europe.
Serica rejected Kistos’ first offer on 1 June 2022 regarding a possible cash and share offer for the entire issued and to be issued share capital of Serica.
INDUSTRIAL LOGIC
The company then made its own offer for Kistos.
“In response to this initial approach from Kistos and recognising the industrial logic of a combination implemented through an appropriate structure, Serica made a non-binding indicative cash and share offer for the entire issued and to be issued share capital of Kistos on 1 July 2022,” said Serica.
“On 8 July 2022 the Serica possible offer was rejected by the board of Kistos.”
This was followed yesterday by Kistos publicly announcing its offer.
Serica added that its own offer would “secure for both sets of shareholders the advantages of scale and diversity attained from combining the asset portfolios”.