LONDON: Ratio Petroleum Energy LP has agreed to acquire Pharos Energy plc for up to 28 pence per share in cash, the companies announced Wednesday, in a deal that values the London-listed oil and gas producer at approximately £116.6 million ($148 million) based on current issued share capital.
The acquisition, to be implemented via a court-sanctioned scheme of arrangement, has secured irrevocable undertakings representing about 41.76% of Pharos’ issued share capital. Pharos’ board is unanimously recommending the offer, which delivers a significant premium for shareholders while providing liquidity in a stock that has historically traded thinly, a statement said.
Terms of the Offer
Under the terms, Pharos shareholders will receive a total consideration of up to 28 pence per share, comprising a base cash consideration of 23.0683 pence, a special dividend of 4.0 pence funded from existing cash resources, and the previously declared final dividend for the 2025 financial year of 0.9317 pence.
Pharos CEO Katherine Roe said the offer reflects the company’s strengthened position following two years of operational turnaround. “We have delivered license extensions in Vietnam, improved fiscal terms in Egypt, and recovered all outstanding receivables,” Roe said. “However, our producing assets are mature, and future growth requires investment from a scaled operator with exploration appetite and access to low-cost capital.”
Strategic Rationale
Ratio, established more than a decade ago as a global exploration vehicle for the Wider Ratio Energies Group, has pivoted to include producing assets. Ratio CEO Itay Raphael said the combination creates a balanced production and exploration company “with the reputation, scale, and technical capabilities to unlock further opportunities.”
The deal comes amid heightened geopolitical volatility in the Middle East and rising commodity prices, which Pharos’ board leveraged to secure improved terms following initial rejection of unsolicited proposals earlier this year.
Background
Pharos operates a portfolio of producing assets in Vietnam and Egypt. The company’s board had been exploring strategic alternatives to address challenges including natural field decline, limited share liquidity, and difficulties securing a farm-in partner for exploration Blocks 125 and 126 in Vietnam.
The acquisition is subject to shareholder approval, regulatory clearances in Vietnam and Egypt, and court sanction. It is expected to complete in the first half of 2027.
