Shares in Genel Energy PLC (LSE:GENL, OTC:GEGYY) rose as much as 9% early on after it said it had agreed to buy Capricorn Energy PLC (LSE:CNE, OTC:CRNZF) in a recommended cash deal valuing the target at around $360 million.
The London-listed oil and gas producer will pay $4.74 for each Capricorn share through an indirectly owned subsidiary, Genel Energy No.9.
That figure comprises $3.75 in cash plus a special dividend of $0.99, expected to be declared before completion.
The offer represents a premium of about 34% to Capricorn's closing on 10 March, the day before the offer period began.
It is pitched 48% above the volume-weighted average price over the prior three months. In early trading, the stock was up 19%.
The special dividend alone amounts to roughly $75 million returned to shareholders, though it will only be paid if the takeover completes.
Capricorn's directors consider the terms fair and reasonable and intend to recommend them unanimously.
The bidder has secured irrevocable undertakings to vote in favour from four shareholders, including activist investor Palliser Capital, covering about 39.3% of the register.
The deal is structured as a Scottish scheme of arrangement, requiring approval from 75% of votes cast at shareholder meetings.
For Genel, the acquisition adds a second production base to its existing 25% interest in the Tawke licence in the Kurdistan region of Iraq.
The enlarged group would hold proven and probable reserves of 117 million barrels of oil equivalent, split roughly evenly between Kurdistan and Egypt.
Combined production stood at just over 41,000 barrels of oil per day based on December 2025 exit rates.
Genel said Egypt had been a target country for expansion, offering a well-established regulatory regime and stable contracts.
Will Hares, senior energy analyst at Bloomberg Intelligence, sees the deal as a fair exit for Capricorn investors from an increasingly difficult standalone case.
He reads the 34% premium to the 10 March close, 48% above the three-month VWAP, as reasonable given Capricorn's Egypt concentration, thin liquidity, receivables risk and rising capex as production declines.
Terms imply 1.8x EV/Ebitda and $12.70 a barrel of 2P reserves.
After an initial burst, Genel's stock settled at 54.73p, up 5%.
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