Genel Energy announced that its indirect subsidiary Genel Energy No.9 Limited has reached an agreement to acquire Capricorn Energy through a recommended cash acquisition. The transaction will be implemented through a Scottish scheme of arrangement under Part 26 of the Companies Act 2006.
Under the terms of the deal, Capricorn shareholders will receive $4.74 in cash for each Capricorn share. This consists of $3.75 in cash and a special dividend of $0.99 that is expected to be declared before the effective date.
The acquisition values Capricorn at approximately $360 million on a fully diluted basis, or about £271 million based on the announcement exchange rate. The sterling equivalent acquisition value of 357 pence per share represents a premium of about 34% to Capricorn’s closing share price on March 10, 2026 and about 48% to its three-month volume-weighted average price through that date.
Capricorn’s directors intend to unanimously recommend that shareholders vote in favor of the scheme. Bidco has also received irrevocable undertakings from certain Capricorn shareholders representing approximately 39.3% of Capricorn’s issued share capital.
The transaction is expected to create a larger and more diversified MENA-focused exploration and production company. Genel said the deal combines its Kurdistan production base with Capricorn’s Egyptian Western Desert portfolio, adding material oil and gas production in a country with an established regulatory regime, stable contracts, and attractive fiscal terms.
Genel’s existing production base includes its 25% non-operated working interest in the Tawke PSC in the Kurdistan Region of Iraq. The company said that asset generated working interest production averaging 17,520 barrels of oil per day in 2025, with a 20,000 barrel-per-day exit rate in December 2025 and operating costs of around $4 per barrel.
The combined group is expected to hold pro forma 2P reserves of 117 million barrels of oil equivalent and production of 41,003 barrels of oil per day based on the combined December 2025 exit rate. Genel said that production would be split evenly between Kurdistan and Egypt.
Capricorn is headquartered in Edinburgh and has been listed on the Main Market of the London Stock Exchange for more than 30 years. Its core operations are in Egypt’s Western Desert, where it holds onshore development and production assets.
In May 2025, Capricorn agreed with EGPC to consolidate eight of its 50:50 jointly owned concessions into a single integrated license with enhanced commercial terms. Capricorn announced in March 2026 that it had received formal parliamentary ratification of the agreement.
Genel said the enlarged group will have the financial capability to allocate capital toward derisking its asset base and maximizing shareholder value. The company also said the acquisition positions the enlarged group to pursue additional value-accretive M&A opportunities in Egypt and the broader MENA region.
The acquisition is conditional on Capricorn shareholder approval and other conditions. Genel and Bidco are also seeking consent from EGPC, and the scheme is expected to become effective during the second half of 2026 if the conditions are satisfied.
Bidco will fund the acquisition price through a combination of existing cash resources and new debt financing. Bidco, Genel, and Genel Energy Holding Company entered into an unsecured acquisition bridge facility agreement of up to $125 million arranged by The Mauritius Commercial Bank.
Support: PJT Partners is serving as financial adviser to Bidco and Genel, while Linklaters is serving as legal adviser. Canaccord Genuity is serving as financial adviser and Rule 3 adviser to Capricorn, Moelis is serving as financial adviser to Capricorn, and Ashurst Perkins Coie is serving as legal adviser to Capricorn.
