LONDON: Norwegian oil and gas company DNO ASA announced Tuesday it has reached an agreement to acquire Capricorn Energy plc for approximately $396 million in cash, marking the company’s entry into the Egyptian oil and gas sector.
The acquisition, to be effected through a Scottish court-approved scheme of arrangement, offers Capricorn shareholders $5.214 per share. The consideration includes a cash payment of $4.224 per share plus a special dividend of $0.99 per share, representing a 45% premium to Capricorn’s closing price of 266 pence on March 10, the day before the offer period began.
Based on the announcement exchange rate, the offer is valued at 384 pence per share, representing a 60% premium to the volume-weighted average price over the three months ended March 10.
“We are pleased to recommend this higher all cash offer from DNO,” said Randy Neely, chief executive officer of Capricorn. “It maximizes the value created by the Capricorn team and importantly increases the return for shareholders.”
Capricorn’s board, advised by Canaccord Genuity, has recommended shareholders approve the acquisition at the upcoming court and general meetings.
Strategic Entry Into Egypt
DNO, Norway’s oldest oil and gas exploration and production company, views the acquisition as a strategic entry into Egypt, which it intends to develop as a third core operating region alongside the North Sea and the Kurdistan Region of Iraq.
The deal comes as DNO has also pursued a possible offer for Genel Energy, the Kurdistan-focused oil company that had previously agreed to acquire Capricorn in July. DNO announced Aug. 7 that it had approached Genel’s board on July 28 with a cash proposal of 69 pence per share, which Genel has rejected as undervaluing the company.
The Genel Offer, which was approved by Capricorn shareholders at meetings held Aug. 18, remains subject to Egyptian regulatory approvals and has not lapsed as a result of DNO’s announcement. However, Capricorn’s directors said they do not currently intend to ask the court to sanction the Genel scheme.
The DNO acquisition is conditional upon shareholder approval, requiring at least 75% of votes cast in favor at both the court meeting and general meeting. The acquisition also requires consent from the Egyptian General Petroleum Corporation.
The agreement includes a facility allowing shareholders to elect to receive the cash consideration in sterling rather than U.S. dollars at prevailing market exchange rates.
Completion is expected in the fourth quarter of 2026 or the first quarter of 2027, subject to conditions being satisfied.
