Genel Energy shares surge 20% as rejects takeover approach by DNO
DNO ASA, an Oslo-based oil and gas operator, on Friday confirmed it approached Genel Energy PLC last week with a possible cash offer, which Genel rejected on Tuesday.
Jersey-registered Genel is an oil producer in the Kurdistan region of Iraq and an explorer in Oman and Somaliland.
The possible offer values Genel at 69 pence per share, or £202 million in total. It would be a 38% premium to Genel's closing share price of 49.95p on Thursday.
Further, under an alternative offer, Genel shareholders would be able to elect to receive a combination of cash and newly issued DNO shares equivalent in value of the indicative cash offer.
In response to the news, Genel shares jumped 21% to 60.42 pence each on Friday morning in London, giving the company a market cap of £168.8 million.
Despite Genel's board rejecting the approach on Tuesday, DNO said it remains willing to engage with the board in relation to the proposal.
In July, Genel struck a deal to acquire Capricorn Energy PLC for USD360 million. A vote by Capricorn Energy's shareholders to approve the scheme is expected to take place on August 18. However, Capricorn received a rival takeover approach from Samos Energy later in July.
DNO has until September 4 to announce either a firm intention to make an offer for Genel, or walk away.
Genel hadn't responded to DNO's announcement by mid-morning Friday.
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