Norwegian oil company DNO has agreed a recommended cash acquisition of Edinburgh-based Capricorn Energy — formerly Bill Gammell’s Cairn Energy — valued at $396 million.
DNO’s offer trumps a $360 million cash takeover offer for Capricorn from London-based Genel Energy.
Under the proposed DNO transaction, Capricorn shareholders would receive an aggregate of $5.214 per share.
That consists of $4.224 per share in cash and an expected $0.99-per-share special dividend to be paid by Capricorn, provided necessary conditions are met.
The total value of the DNO offer represents a roughly 10% premium to the $4.74-per-share acquisition value offered by Genel.
Capricorn Energy’s biggest shareholders include hedge funds Palliser Capital, Newtyn Partners and Kite Lake Capital Management with 13.67%, 12.26% and 7.89% of shares respectively, according the the Capricorn website.
Capricorn Energy CEO Randy Neely said: “We are pleased to recommend this higher all cash offer from DNO. It maximises the value created by the Capricorn team and importantly increases the return for shareholders.”
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.”
Genel Energy said: “Genel Energy plc (Genel) and Genel Energy No.9 Limited (Bidco), a private limited company indirectly owned by Genel, note the announcement regarding the recommended cash acquisition of Capricorn by DNO Bidco AS, a company directly wholly owned by DNO ASA, announced earlier today.
“Following the DNO Offer, Genel is considering its position and a further announcement will be made when appropriate. Capricorn shareholders are strongly advised to take no action in response to the DNO offer in the meantime …”