Capricorn Energy PLC (LSE:CNE) has agreed to a recommended cash acquisition by DNO Bidco AS, a wholly owned subsidiary of Norway-based DNO ASA, which is expected to be implemented through a Scottish scheme of arrangement.

Under the terms, Capricorn shareholders would receive total value of US$5.214 per share, comprising US$4.224 in cash from DNO and a planned special dividend of US$0.99 per share.

The total consideration is equivalent to approximately 384 pence per Capricorn share and represents a 45% premium to the company’s undisturbed share price and a 60% premium to its three-month average price before the relevant period.

DNO proposal implies equity value of about US$396 million

The transaction implies a fully diluted equity value for Capricorn of approximately US$396 million.

According to the supplied information, this is around US$36 million above the value of a competing proposal from Genel Energy.

Capricorn’s board, which is being advised by Canaccord Genuity, considers the terms of the DNO transaction fair and reasonable for shareholders and has recommended the acquisition.

Shareholders will also have access to a foreign-exchange facility allowing them to receive the cash consideration in sterling rather than U.S. dollars.

Special dividend remains subject to statutory requirements

The planned US$0.99-per-share distribution represents a total Permitted Dividend of US$75 million.

Payment of the dividend remains subject to applicable statutory requirements and the discretion of Capricorn’s board. If the dividend cannot lawfully be paid in full, the directors could reconsider whether to proceed with the scheme.

Under the agreed terms, the US$4.224-per-share cash acquisition price payable by DNO will not be reduced by the amount of the Permitted Dividend.

Capricorn Energy PLC is an oil and gas exploration and production company whose operations and cash flows are predominantly denominated in U.S. dollars. Its shares are listed in the UK.