Capricorn Energy recommends USD396 million DNO takeover offer

Capricorn Energy PLC on Tuesday recommended a higher cash takeover offer from DNO Bidco AS, as Norway's DNO ASA seeks to expand into Egypt's oil and gas sector.

The Edinburgh-based oil and gas company said DNO will pay USD4.224 per share in cash, plus a special dividend of USD0.99, for total consideration of USD5.214 per share.

The offer values Capricorn at around USD396 million and represents a 10% premium to the value agreed with Genel Energy PLC in July.

DNO's offer also represents a 45% premium to Capricorn's closing share price of 266 pence on March 10, before the offer period began.

DNO Bidco is wholly owned by Norwegian oil and gas company DNO. The acquisition is intended to be implemented by way of a scheme of arrangement and remains subject to shareholder and other approvals.

Capricorn said its directors had been advised by Canaccord Genuity that the terms of the DNO offer were fair and reasonable and intend to recommend unanimously that shareholders vote in favour of the deal.

The DNO offer increases the consideration available to Capricorn shareholders by USD0.474 per share compared with the Genel offer.

Shares in Capricorn Energy were up 9.2% to 374.42 pence per share on Tuesday afternoon in London.

Capricorn said the acquisition is expected to become effective in the fourth quarter of 2026 or first quarter of 2027, subject to the conditions being satisfied.

Capricorn Chief Executive Officer Randy Neely said: "We are pleased to recommend this higher all-cash offer from DNO. It maximises the value created by the Capricorn team and importantly increases the return for shareholders."

In July, Genel agreed to acquire Capricorn for USD4.74 per share, comprising USD3.75 in cash and a special dividend of USD0.99. That offer remains subject to conditions, including Egyptian approvals. However, Capricorn said its directors do not currently intend to seek court sanction of the Genel scheme or to declare the special dividend connected with that offer.

Separately, DNO approached Genel in July with a possible takeover proposal which was rejected by Genel.

DNO's acquisition of Capricorn would give DNO an entry into Egypt, with the company intending to develop the country as a third core area alongside its North Sea and Kurdistan operations.

Executive Chair Bijan Mossavar-Rahmani of DNO said: "DNO has ambitious plans to build a significant Egyptian business through investment in Capricorn's portfolio, participation in new license rounds and additional acquisitions. DNO's technical capability, financial strength and can-do attitude will fuel that growth."

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