Capricorn Energy, the Edinburgh-based oil and gas company, is caught in a takeover trap as one of its pursuers, Genel Energy, is now subject to its own takeover bid.
Kurdistan-focused Genel has received and rejected a £202 million, or 69p-per-share, offer from Norway’s DNO which now has 28 days to consider improving the price.
In the meantime, Capricorn shareholders are due to vote on 18 August on a recommended all-cash $360m offer from Genel.
Further complicating the situation is that Capricorn has received further proposals from Saudi investment group Alamadiyaf al-Masiyyah and London group Samos Energy which have a deadline of next Tuesday to formalise their intentions.
Shares in Genel surged by as much as a quarter on hopes that DNO would return with a higher offer. Its current offer represents a 38% premium to Genel’s closing share price on 6 August. DNO has also proposed a cash-and-shares alternative of equivalent value.
DNO said its offer provides Genel shareholders with a substantial premium and certainty of value regardless of the outcome of the Capricorn transaction.
It noted that several other parties have indicated interest in the Scottish company, founded as Cairn Energy by Sir Bill Gammell in the early 1980s.
Should Genel fail to secure Capricorn, DNO argues that the company would remain without the planned diversification while carrying corporate overheads that could be disproportionate to the size of the business.
DNO has highlighted the liquidity offered by an all-cash transaction, given relatively thin trading in Genel shares, as well as the potential benefits of greater operational scale in Kurdistan amid continuing security and commercial risks.
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