Genel Energy, a Kurdistan-based company, marks Egypt's entry with a $360 million Capricorn acquisition
Genel Energy announced on Thursday that it would?acquire?Capricorn Energy for $360m in a cash-only deal. This will give it a foothold into Egypt, as it looks to diversify its oil assets, which are prone to disruption, in Iraqi Kurdistan.
Genel will pay a total of $4.74 for each Capricorn stock, consisting of $3.75 cash and $0.99 in special dividends. This represents a 33 percent premium over the closing price at which Capricorn closed on March 10, a day before Cafani Group, a rival suitor, made its interest in the company public.
Following the announcement of this offer, shares of Capricorn Energy jumped 22%, to PS3.51 ($4.68). This is their highest level since 2012. Genel shares rose 9% to 57 pence.
DEAL LEAVES GENERAL WELL?POSITIONED TO FURTHER M&A
Genel is a major player in Iraq's Kurdistan Region, where it has a 25% non-operated interest in the Tawke Field, jointly owned with Norway's DNO.
The dispute between Baghdad, the Kurdistan Regional Government and Kurdistan has caused years of disruptions to the export of oil via the Iraq-Turkey Pipeline.
The Iran war has increased security risks in the area.
Genel will be reshaped into a?larger, more diversified manufacturer with output evenly split between Egypt and Iraqi Kurdistan.
Genel stated in a press release that "the Enlarged Group" is well positioned for further value-adding M&As within Egypt and the MENA Region more broadly.
Capricorn’s Western Desert assets would add material production in a country that has a well-established regulation regime, stable contracts, and attractive fiscal terms.
Capricorn has been attracting takeover interest from Saudi Arabia’s privately-held Cafani Group for several months. The group has made a number of approaches and is now facing a deadline on July 29 to submit a formal offer after several extensions.
Capricorn’s board of directors said that it would unanimously recommend the Genel deal. It said it was superior to any other credible proposals including those from Cafani Group.
(source: Reuters)
