Serica Energy said Monday its cash takeover offer for Pharos Energy is final and will not be increased [1].
The decision leaves the door open for a rival bidder to secure the UK-based company, potentially shifting the ownership of Pharos Energy to an international operator.
Israel-based Ratio Petroleum Energy LP has already moved to capitalize on Serica's position. On Friday, Ratio Petroleum raised its all-cash offer for Pharos Energy to approximately £146.4 million [2]. This updated proposal outbids the current offer from Serica Energy, which stands at £145.7 million [1].
Following the increased bid from the Israeli firm, the board of Pharos Energy said it recommends Ratio Petroleum's proposal [2]. The board's shift comes as the two companies competed to acquire the energy producer's assets.
Serica Energy, a British oil and gas producer, maintained its original valuation despite the competitive pressure from Ratio Petroleum [1]. The company's refusal to enter a bidding war effectively cedes the board's recommendation to the higher bidder.
The competition between the two firms highlights the strategic value of Pharos Energy's portfolio. While Serica sought to expand its footprint through the acquisition, Ratio Petroleum's willingness to provide a higher cash sum has placed it in the lead [2].
Both Serica and Pharos are based in the United Kingdom, while Ratio Petroleum operates from Israel [1, 2]. The final outcome of the takeover will depend on shareholder approval of the board-recommended bid.
“Serica Energy said Monday its cash takeover offer for Pharos Energy is final.”
The refusal of Serica Energy to increase its bid suggests a strict valuation ceiling for the acquisition. By favoring Ratio Petroleum's higher offer, the Pharos Energy board is prioritizing immediate shareholder value over a potential domestic merger. This move indicates a growing appetite among international energy firms to acquire established UK-based oil and gas assets through cash-heavy takeovers.
