- Genel has raised its recommended offer for Capricorn to $5.74 a share, valuing the company at about $436 million.
- DNO said on 28 September that its competing $5.214 offer is final and will not be increased.
- Genel now has the stronger commercial position, but completion remains subject to an Egyptian condition and the mechanics of its amended scheme.
Genel Energy has regained the advantage in the contest for Capricorn Energy after raising its offer by 10%, prompting rival bidder DNO to declare that it will not increase its own proposal.
Genel’s revised recommended offer gives Capricorn shareholders an aggregate $5.74 a share, equivalent to approximately 434p at the exchange rate used in the announcement. It comprises $4.75 in acquisition cash and a planned special dividend of $0.99. The offer values Capricorn’s issued and to-be-issued share capital at about $436 million, or £330 million.
The price represents a 63% premium to Capricorn’s undisturbed closing price on 10 March and an 80% premium to its preceding three-month volume-weighted average. Capricorn’s board withdrew its recommendation for DNO’s offer and reinstated its support for Genel.
On Monday, DNO said its $5.214/share all-cash terms were “final and will not be increased”, citing a “highly disciplined approach to M&A”. It also ruled out switching its proposal from a scheme of arrangement to a contractual takeover offer.
Although DNO’s offer has not technically lapsed, its declaration removes the most obvious route to a further auction. Genel is now clearly favoured unless a new bidder emerges or an exceptional circumstance permits DNO to revisit its statement under the Takeover Code.
Shareholders strengthen Genel’s hand
Genel has secured irrevocable undertakings covering 39.1% of Capricorn’s existing share capital from Palliser Capital, Newtyn Management, Kite Lake Capital Management and Madison Avenue Partners, alongside a director undertaking. The institutional commitments remain binding unless a competing proposal improves on Genel’s offer by at least 10%.
If shares underlying certain swap positions are acquired, the proportion covered could increase to 51.8%. In addition, more than 99% of the Capricorn shares voted at court and general meetings in August supported Genel’s original transaction.
Regulatory execution is also advanced. The Egyptian Competition Authority approved the acquisition on 7 September. Genel says one remaining “Egyptian Condition” is outstanding but continues to expect the scheme to become effective during the fourth quarter.
DNO’s revised $5.214 was payable entirely by the bidder. Under Genel’s $5.74 package, $0.99 is to be paid by Capricorn as a special dividend, subject to the statutory requirements applying when it is declared.
Capricorn’s board has concluded that it should have sufficient resources, while Genel’s financial adviser has confirmed funding for the $4.75 acquisition payment but was not required to confirm the dividend resources. The board nevertheless considers the overall proposal superior in value, certainty and deliverability.
The strategic rationale is diversification. Genel produced 17,520 barrels of oil a day in 2025, but its principal producing assets remain in the Kurdistan Region of Iraq, where export routes, payments and politics have repeatedly affected cash flow. Capricorn offers exposure to Egypt’s Western Desert under a consolidated concession with improved commercial terms.
Capricorn’s latest results underline the attraction. The company reported H1 Egyptian revenue of $100 million, average working interest production of 19,337 barrels of oil equivalent a day and group cash of $114 million after repaying its remaining debt.
For Genel, paying the higher price reduces immediate acquisition upside but buys a faster route to geographic and cash flow diversification. For Capricorn shareholders, the withdrawal of further DNO bidding removes the auction premium but materially increases deal certainty. The remaining story is therefore less about price escalation and more about Egyptian approval, scheme implementation and Genel’s ability to convert two politically complex portfolios into a more resilient producer.
