Announcement

Pharos Energy (LON:PHARP) shares surged as much as 33.9% on Monday, reaching a 2026 high and extending the year‑to‑date gain to roughly 55% after oil and gas producer Serica Energy announced a cash takeover valued at £145.7 million, outbidding a rival proposal from Ratio.

Deal Terms

Under the agreed scheme of arrangement, Serica will acquire 100% of the issued and to be issued ordinary share capital of Pharos pursuant to Part 26 of the Companies Act 2006. The consideration consists of a cash payment of 28.6683 pence per Pharos share together with a special dividend of 4 pence per share paid from Pharos’ existing cash resources, resulting in a total cash value of 32.6683 pence per share. In addition, Pharos shareholders will retain the final dividend of 0.9317 pence per share for the financial year ended 31 December 2025, declared on 25 March 2026 and paid on 17 July 2026, bringing the aggregate amount received to 33.6 pence per share.

The 32.6683 pence per share represents a premium of 20.7% over the 27.0683 pence per share aggregate consideration offered by Ratio, and a premium of 28.6% over the undisturbed closing price of 25.4 pence on 23 June 2026, the last trading day before the Ratio offer. Compared with Ratio’s total offer value of 28 pence per share, the aggregate amount including the final dividend is 20.0% higher.

Shareholder Support

Serica has secured an irrevocable undertaking from Aberforth Partners LLP to vote in favour of the acquisition for 59,357,027 Pharos shares, representing approximately 14.26% of Pharos’ share capital at the latest practicable date.

Board Actions

The Pharos board unanimously withdrew its recommendation of the Ratio offer and intends to unanimously recommend the Serica acquisition to its shareholders. Consequently, the board adjourned the Ratio‑related shareholder meetings scheduled for 17 August and urged shareholders to take no action with respect to the Ratio proposal.

Regulatory Conditions and Timeline

The acquisition is conditional upon the satisfaction or waiver of regulatory approvals in Vietnam and Egypt, among other conditions, and is expected to become effective in the first half of 2027.

Market Reaction

While Pharos shares rallied, Serica’s share price fell up to 5.8% on the day, reflecting investor concerns over the acquisition cost. Serica itself is up about 44% year‑to‑date.