Kurdistan-focused Genel Energy marks Egypt entry with $360 million Capricorn takeover (updated)

Genel Energy

Today 07:45

Genel to pay $4.74 per Capricorn share in cash, special dividend
Capricorn's board to unanimously recommend Genel offer 
Capricorn shares jump 22%, Genel up 9% on bid announcement
Adds shares in paragraph 3, details and background from 4 and graphics

    July 2 (Reuters) - Genel Energy GENL.L will acquire Capricorn Energy CNE.L for $360 million in an all-cash deal, it said on Thursday, giving it a foothold in Egypt as it moves to diversify beyond its disruption-prone oil assets in Iraqi Kurdistan.
Genel will pay $4.74 per Capricorn share, comprising $3.75 in cash and a $0.99 special dividend, representing a 33% premium to Capricorn's closing price on March 10, the day before rival suitor Cafani Group's interest in the company became public.
Shares of Capricorn Energy rose as much as 22% to £3.51 ($4.68), their highest level since 2012, following the announcement of the offer. Genel shares were up 9% at 57 pence.
 
DEAL LEAVES GENEL WELL POSITIONED FOR FURTHER M&A
Genel operates in Iraq's Kurdistan region, where its main production comes from a 25% non-operated stake in the Tawke field, which is jointly held with Norway's DNO DNO.OL.
It has navigated years of disruptions in exports via the Iraq-Turkey pipeline due to disputes between Baghdad and the Kurdistan Regional Government.
The Iran war has added to security risks in the region.
The takeover will reshape Genel into a larger, more diversified producer with output split evenly between Egypt and Iraqi Kurdistan.
"The Enlarged Group is well positioned to pursue further value-accretive M&A within Egypt and the MENA region more generally," Genel said in a statement.
Capricorn's Western Desert assets would add material production of oil and gas in a country with a well-established regulatory regime, stable contracts and attractive fiscal terms, it added.
Capricorn had drawn takeover interest for months, including from Saudi Arabia's privately held Cafani Group, which has made multiple approaches and has a July 29 deadline to table a formal bid after several extensions.
Capricorn's board said it would unanimously recommend the Genel deal, which it said was superior to other credible proposals, including approaches from Cafani Group.
     
($1 = 0.7506 pounds)

 (Reporting by DhanushVignesh Babu and Nithyashree R B in Bengaluru; Editing by Rashmi Aich and Joe Bavier)
 ((DhanushVignesh.Babu@thomsonreuters.com))