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Kistos PLC and Serica Energy PLC on Tuesday revealed they have traded takeover offers, with each rejecting the other as they mull combining to create a company that could rank within the FTSE 250 index.
Shares in Kistos were up 4.3% at 483.00 pence each on Tuesday morning in London, giving the company a market capitalisation of just over £400 million. Shares in Serica Energy were trading 13% higher at 345.00p, giving it a market value of £938.1 million.
London-based energy industry investor Kistos said that its proposed combination terms value Serica at 382p per share. This represents a 25% premium to its closing share price of 305p on Monday.
Kistos is offering 0.2932 new Kistos shares and 246p in cash for each Serica share. Under this, Serica's shareholders would own roughly 50% of the combined new firm.
‘Kistos believes that the proposed combination will create a leading independent North Sea champion, led by the right team with the right strategy,’ the company said.
Kistos also noted that ‘at current market valuations, the combined company would rank among companies currently within the FTSE 250 index.’
However, Serica rejected the offer - and instead made its own takeover offer for Kistos, valuing it at 483p per share in another cash-and-shares approach.
Serica, as it rejected Kistos's bid, noted the benefits of a combination and proposed a ‘limited mutual exchange of information under a non-disclosure agreement’ to explore a transaction. Serica than tabled a bid at the start of July.
Serica's bid - of 90p in cash and 1.29 new Serica shares for each Kistos one held - represents a premium of 4% to Kistos's closing share price on June 30 of 463p per share.
Kistos, however, rejected Serica's offer as well.
‘The board of Kistos believes that the terms of the Serica proposal are at the wrong price, with the wrong mix of stock and cash given leverage capacity. The proposed combination by Kistos, in contrast, is at what the board of Kistos considers to be the right price, with the right mix of stock and cash,’ Kistos explained.
Both companies warned that there is no certainty that an offer will be made.
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