LONDON: Genel Energy plc has agreed to acquire Capricorn Energy plc in a recommended all-cash transaction valued at approximately $360 million, the companies announced Thursday.
Under the terms of the deal, Capricorn shareholders will receive $4.74 in cash for each share held, consisting of a $3.75 acquisition price and a $0.99 special dividend. The sterling equivalent of 357 pence per share represents a 34% premium to Capricorn’s undisturbed closing price of 266 pence on March 10, the day before the offer period commenced.
The acquisition, which will be effected through a Scottish scheme of arrangement under Part 26 of the Companies Act 2006, is expected to close during the second half of 2026, subject to shareholder and court approvals. The Capricorn board, advised by Canaccord Genuity, has unanimously recommended that shareholders vote in favor of the transaction.
Deal Creates Diversified MENA Energy Player
Genel identified Egypt as a priority market for expansion and determined that Capricorn’s Western Desert portfolio provides an attractive strategic complement to its existing operations in the Kurdistan Region of Iraq. The combined entity will hold pro-forma 2P reserves of 117 mmboe and production of 41,003 barrels of oil per day, evenly split between the two jurisdictions.
“The Acquisition will create an independent energy company of scale in the MENA region with a strong, low leverage balance sheet, significant production, reserves and resource upside,” Genel stated in the announcement.
The enlarged group will benefit from complementary technical capabilities, with Genel’s reservoir management and production optimization expertise supporting Capricorn’s existing technical engagement with its Egyptian partners, including Cheiron and EGPC.
Genel’s existing production base consists of a 25% non-operated working interest in the Tawke PSC in Kurdistan, which generated average production of 17,520 bopd for the full year of 2025 at industry-leading operating costs of approximately $4 per barrel.
Shareholder Support and Conditional Approvals
Bidco has secured irrevocable undertakings to vote in favor of the scheme from shareholders representing approximately 39.3% of Capricorn’s issued share capital, including Palliser Capital, Newtyn Management, Kite Lake Capital Management, and Madison Avenue Partners.
The special dividend component of $0.99 per share, representing an aggregate payment of approximately $75 million, will be paid in sterling not more than 14 days after the effective date, contingent upon the scheme becoming effective. The Capricorn board has determined the company will have sufficient cash resources to pay the dividend in full, though shareholders were cautioned that various factors outside the company’s control could affect this ability.
The acquisition is conditional upon receiving consent from the Egyptian government, a condition included at Genel’s request. Genel stated it has initiated discussions with Egyptian authorities and intends to seek Panel permission to invoke the condition if it is not satisfied by the long-stop date.
The Scheme Document containing further details will be published within 28 days of the announcement.
Commenting on the acquisition, Randy Neely, Chief Executive Officer of Capricorn, said: “Since my appointment three years ago, the team has delivered strongly against our strategic priorities — returning approximately US$600 million to shareholders, reducing costs, and maximising value from our Egyptian asset base through the recently signed merged concession, establishing a sustainable long-term business. However, Capricorn requires greater scale to materially improve trading liquidity. We believe the transaction with Genel crystallises the value created by Capricorn while providing shareholders with a clear and efficient exit.”
Commenting on the acquisition, Paul Weir, Chief Executive Officer of Genel, said: “Today we announce a landmark transaction to acquire a leading oil and gas portfolio in Egypt — a move that delivers our strategic intent, reshapes our company’s growth trajectory, diversifies our portfolio of oil and gas fields and begins our role as a partner in Egypt’s energy future.
The acquisition of Capricorn Energy and its portfolio brings high‑quality assets, material reserves, and a talented local workforce that together create immediate scale and opportunity for further onward investment and growth. By applying our technical and operational capabilities to these assets, we will work with the operator to accelerate production optimisation, replace reserves, reduce unit costs, and capture significant near‑term cash flow while preserving optionality for future development.
Equally important, this transaction commences the start of a relationship with and commitment to Egypt and its communities. We will work closely with government partners and host communities to ensure safe, environmentally responsible operations and to maximise local content and job creation.
For our shareholders, the acquisition is expected to realise accretive cash flow and returns over the coming years. For our employees and those joining from the Capricorn team, it creates new opportunities to grow and to apply best practices across a larger, more diversified asset base.
We enter this next chapter of further value creation with resolve and determination. Delivering on the promise of this transaction will require a high degree of expertise, rigorous execution, transparent engagement with stakeholders, and an unwavering commitment to safety and sustainability. I am confident that we will realise the full potential of these assets and create sustainable value for all our stakeholders.”
