LONDON: Ratio Petroleum Energy LP has increased its recommended all-cash offer for Pharos Energy plc to approximately £146.4 million, exceeding a competing bid from Serica Energy plc, the companies announced Friday.
Under the revised terms, Pharos shareholders will receive 28.8183 pence in cash per share plus a 4 pence special dividend, for a total of 32.8183 pence per share. Combined with a previously paid final dividend of 0.9317 pence, the aggregate value reaches 33.75 pence per share.
The new offer values the London-listed oil and gas producer at a 29.2% premium to its closing price of 25.4 pence on June 23, the last trading day before the original Ratio offer was announced. It also represents a 0.5% premium to the 32.6683 pence per share offered by Serica on July 26.
“The increased Ratio Offer provides Pharos shareholders with superior value than under the Serica Offer,” the company said in a statement.
Pharos Directors, advised by Rothschild & Co, have unanimously recommended the revised offer and withdrawn their previous recommendation of the Serica bid. The directors who hold Pharos shares, representing 0.57% of the company, have given irrevocable undertakings to vote in favor.
Ratio has secured irrevocable undertakings from shareholders representing approximately 41.76% of Pharos’ issued share capital. Among these, undertakings covering 81.4 million shares — 19.55% of the company — are now binding even in the event of a higher competing offer.
The transaction will be effected through a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006. The Long Stop Date for completion has been extended to July 15, 2027.
The Cash Consideration will be funded by an increased irrevocable letter of credit from Israel Discount Bank Ltd, with potential alternative financing arrangements to be announced later.
The Pharos Board intends to adjourn shareholder meetings originally scheduled for Aug. 17 to allow more time for voting decisions, with an updated timetable to follow.
Shore Capital is acting as financial adviser to Ratio. Rothschild & Co is providing independent financial advice to Pharos Directors.
Pharos Energy holds working interests in oil and gas fields in Vietnam and Egypt. Ratio Petroleum is an Israeli energy exploration and production partnership.
