Serica Energy (LSE:SQZ) has confirmed that it will not increase the financial terms of its recommended cash offer for Pharos Energy (LSE:PHAR), maintaining the total value at 32.6683 pence per share despite the emergence of a higher competing proposal from Ratio Petroleum.
Serica’s offer consists of 28.6683 pence in cash for each Pharos share alongside a 4.0 pence special dividend, giving shareholders a combined value of 32.6683 pence per share. The company has declared these financial terms final and said they will not be increased, except in the limited circumstances permitted under UK takeover rules.
The decision reflects Serica’s emphasis on maintaining financial discipline when pursuing acquisitions rather than entering an escalating bidding contest. The competitive situation has intensified after Ratio secured irrevocable undertakings covering approximately 41.76% of Pharos Energy’s issued share capital.
While Serica continues to pursue its recommended offer, management has highlighted a broader pipeline of potential growth opportunities in the UK North Sea and other markets. This provides the company with alternative options for deploying capital should its proposed acquisition of Pharos ultimately prove unsuccessful.
Serica’s wider outlook reflects a combination of challenges and supportive factors. Financial performance has been mixed following a significant downturn during 2025 and uneven free cash flow generation. However, management has reiterated its production and cash guidance while highlighting improved liquidity, providing greater financial flexibility for future investment and potential acquisitions. Technical indicators remain moderately weak, while a high dividend yield provides valuation support despite a negative price-to-earnings ratio resulting from reported losses.
More about Serica Energy
Serica Energy is a UK-listed oil and gas company engaged in exploration, development and production, with its operations primarily focused on the UK North Sea. The group combines investment in its existing upstream portfolio with a disciplined mergers and acquisitions strategy designed to expand its asset base while maintaining financial prudence and operational focus.
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