Serica Energy plc has rejected a new revised cash and share merger offer from Kistos plc for its assets in the North Sea.
OFFER
Two weeks ago, the exploration and production company rejected the smaller company’s first offer.
Kistos revised proposal offers 425 pence per Serica share and is an 11% increase to Serica shareholders when compared with the first Kistos possible offer.
Serica noted that more than 60% of the increase in headline value was driven by the rise in the Kistos share price from 11 July 2022.
REFUSAL
Serica today refused the Kistos revised possible offer because it “significantly” undervalued Serica and relied on “using Serica’s own cash to partly fund the cash component of the transaction”.
Additionally, Kistos’ proposal would see a change in Serica’s leadership, namely that Andrew Austin of Kistos would become chief executive of the combined entity.
Serica said its own leadership had an “outstanding track record”.
“The board reiterates its position that it will not recommend any deal on terms which it believes are unattractive to its shareholders and wider stakeholders,” added Serica in a statement.
“Serica shareholders are strongly advised not to take any action.”
DEADLINE
In accordance the City code on takeovers and mergers, Kistos has until 5pm on 9 August 2022 to announce whether or not it intends to make an offer for Serica.
This deadline will be extended only with the consent of Serica and the panel on takeovers and mergers.
SERICA ENERGY
More than 85% of Serica’s production is natural gas.
The company’s website states that, at the start of 2022, Serica had approximately £218 million in cash, cash equivalents and hedging advances, no debt and limited decommissioning liabilities.