Corporate M&A – Serica Energy makes higher recommended offer for Pharos Energy
(Originally posted on July 27, 2026)
On 26 July 2026, Serica Energy announced that it had reached agreement on the terms of a recommended cash offer to acquire Pharos Energy.
The acquisition is intended to be implemented by way of a scheme of arrangement. Under the terms of the offer, Pharos shareholders would receive 28.6683 pence in cash per share, plus a 4.0 pence per share special dividend, giving a total value of 32.6683 pence per share. Pharos shareholders who qualified also retain the previously declared FY25 final dividend of 0.9317 pence per share, taking the total amount received to 33.6 pence per share.
The offer values Pharos’ issued and to be issued ordinary share capital at approximately £145.7 million.
This is a material increase on the earlier recommended offer from Ratio Petroleum Energy LP. Ratio’s offer valued Pharos at 28.0 pence per share including the FY25 final dividend. Serica’s offer therefore represents a 20.0% increase to the Ratio total offer value, and a 20.7% premium to the Ratio cash and special dividend component.
The Pharos Board has unanimously withdrawn its recommendation of the Ratio offer and now intends to recommend the Serica acquisition. Pharos also intends to adjourn the Ratio shareholder meetings that had been scheduled for 17 August 2026.
This does not mean the Ratio offer has disappeared. Certain Ratio shareholder undertakings can lapse unless Ratio matches the Serica offer within the relevant 10 or 15 business day period. However, the process has clearly moved from a recommended Ratio acquisition to a competitive situation, with Serica now holding the board recommendation.
We looked at the Ratio offer in more detail here and a comparison of the two offers is shown in the table below:
|
Item |
Ratio offer |
Serica offer |
|
Announcement date |
24 June 2026 |
26 July 2026 |
|
Offer structure |
Recommended cash acquisition by
scheme of arrangement |
Recommended cash acquisition by
scheme of arrangement |
|
Cash consideration |
23.0683p/share |
28.6683p/share |
|
Special dividend |
4.0p/share |
4.0p/share |
|
FY25 final dividend |
0.9317p/share |
0.9317p/share, already paid to
qualifying shareholders |
|
Total value to Pharos
shareholders |
28.0p/share |
33.6p/share |
|
Implied equity value |
c.£124.3m |
c.£145.7m |
|
Board recommendation |
Previously recommended |
Now recommended |
|
Current position |
Board recommendation withdrawn;
matching right under shareholder undertakings |
Recommended by Pharos Board |
The question now is not just which offer is higher, but what each bidder would do with Pharos’ portfolio, and whether Serica sees Vietnam as a one-off diversification asset or the start of a wider Southeast Asian strategy.
