Kistos: Serica Energy Rejects Revised Combination Terms

Kistos PLC (KIST.L) Monday announced that Serica Energy plc’s (SQZ.L) Board of Directors has rejected the revised terms of its merger proposal.

In London, Kistos shares were trading at 517.40 pence, down 2.4 percent, while Serica Energy shares were trading at 362.21 pence, up 1.46 percent.

It was on July 12 that Kistos proposed a combination with Serica Energy.

On July 22, Kistos in a letter to Serica Energy’s board, revised the combination terms for the entire issued and to be issued share capital of Serica.

In an update, the company noted that the Board of Serica rejected the revised combination terms, with no rationale given nor engagement with the Board of Kistos.

Kistos now said it has decided to announce the revised combination terms in the interest of continued transparency.

The proposed combination comprises a possible cash and share-for-share exchange offer by Kistos for Serica. Under the revised terms, Kistos would offer for each Serica share 0.4000 new Kistos shares; plus cash of 213 pence. The cash portion comprises a distribution of capital to Serica shareholders via a cash payment of 67 pence per share; and cash consideration equivalent to 146 pence per Serica share.

Based on the closing price of 530 pencei per Kistos share on July 22, the Revised Combination Terms give an offer value of 425 pence per Serica share. The offer represents a premium of 19 percent to the closing price of 357 pence per Serica share on the Latest Practicable Date.

The Revised Combination Terms represent an 11 percent increase to the headline offer value.

Under the revised terms, Serica shareholders would own approximately 58 percent of the issued share capital of the combined business, in addition to receiving a significant cash component.

Kistos continues to urge Serica shareholders to encourage its Board to engage in constructive discussions with Kistos Board regarding the proposed combination.

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