LONDON: Serica Energy plc has agreed to acquire rival oil and gas producer Pharos Energy plc for approximately 145.7 million pounds in cash, topping an existing offer from Ratio, the companies announced Monday.
Under the terms of the scheme of arrangement, Pharos shareholders will receive 28.6683 pence per share in cash plus a special dividend of 4 pence per share, bringing the total consideration to 32.6683 pence per share. Combined with Pharos’ final dividend of 0.9317 pence per share already paid for the 2025 financial year, shareholders will receive a total of 33.6 pence per share, a statement said.
The offer represents a 20.7% premium to the cash consideration and special dividend offered under the Ratio bid and a 28.6% premium to Pharos’ undisturbed closing price of 25.4 pence per share on June 23, the last business day before Ratio’s offer.
Pharos’ board has withdrawn its recommendation of the Ratio offer and unanimously endorsed the Serica proposal. The company intends to adjourn shareholder meetings scheduled for Aug. 17 regarding the Ratio offer.
“This offer from Serica delivers shareholders a material premium in cash to the Ratio Offer,” said Katherine Roe, Pharos’ chief executive officer.
The acquisition establishes Serica’s presence in Southeast Asia, adding cash-generative production in Vietnam and Egypt while maintaining a debt-free balance sheet with approximately $45 million in cash as of June 30, according to the companies.
Serica CEO Chris Cox called the deal “a compelling opportunity to deliver a first step in our long-standing strategic objective of adding to the diversification of our business through international expansion.”
The combined company would see a 13% increase in proven and probable reserves to 156.8 million barrels of oil equivalent and a 15% increase in contingent resources to 129.4 million barrels. The pro forma 2026 exit production rate is expected to reach approximately 70,000 barrels of oil equivalent per day.
Serica has secured an irrevocable undertaking from Aberforth Partners LLP representing approximately 14.26% of Pharos’ shares to vote in favor of the scheme.
The acquisition is conditional on regulatory approvals in Vietnam and Egypt and is expected to close in the first half of 2027. Serica reserves the right to implement the acquisition through a takeover offer if necessary.
Serica will host a presentation for investors on the Investor Meet Company platform on July 27 at 9 a.m. BST.
Rothschild & Co is providing financial advice to Pharos, while Peel Hunt is advising Serica.
Serica Energy plc is an independent oil and gas company operating primarily in the UK North Sea. Pharos Energy plc is an independent oil and gas exploration and production company with operations in Vietnam and Egypt.
