Serica Energy plc (AIM: SQZ) has agreed a recommended acquisition of Pharos Energy plc (LON: PHAR) through a scheme of arrangement, valuing Pharos at £145.7 million.
Under the terms of the deal, Pharos shareholders will receive 28.6683p in cash per share, alongside a 4.0p special dividend, taking the total value to 32.6683p per share.
The offer represents a 28.6% premium to Pharos’ undisturbed closing share price on 23 June 2026 and is 20% higher than a previous proposal from Ratio.
Serica said the acquisition supports its strategy of international expansion and portfolio diversification. The transaction is expected to increase the group’s reserves and resources while adding materially cash-generative production.
Completion is anticipated during the first half of 2027, subject to shareholder, regulatory and court approvals.
Katherine Roe, Pharos’ CEO, stated:
“As announced in our recent trading update, the business is benefitting from strong operational momentum. At the same time, the Board of Pharos is delighted to be recommending this offer from Serica, which delivers shareholders a material premium in cash to the Ratio Offer.”
Chris Cox, Serica’s CEO, stated:
“The acquisition of Pharos is a compelling opportunity to deliver a first step in our long-standing strategic objective of adding to the diversification of our business through international expansion, on terms that are accretive on a per share basis across all key metrics, with multiple embedded growth options. Upon completion the transaction will boost our reserves, resources and add materially cash-generative production, while at the same time delivering an attractive liquidity route for Pharos shareholders.
Pharos brings a highly experienced regional team and an operating model that mirrors our own focus on cash generation funding both growth and returns. As we continue to invest in the UK North Sea, with a multi-well rapid return drilling programme set to begin in 2027, this presents a complementary platform from which to grow in South East Asia, a region with increasing energy demand that benefits from a supportive environment for upstream investment. With a robust balance sheet and material ongoing cash generation, we continue to analyse multiple opportunities to deliver further M&A and create significant value for shareholders.”
