Story
Capricorn Energy Shares Fall as DNO Declares Final Offer, Ending Bidding War
Summary
Shares in the Edinburgh-based oil and gas producer declined after suitor DNO ASA announced its all-cash offer was final, ceding the advantage to rival bidder Genel Energy and removing a takeover premium from the stock.
Shares in Capricorn Energy (LSE:CNE) fell by 5.0% on Wednesday after Norwegian oil firm DNO ASA issued a formal statement declaring its takeover offer as final, effectively ending a competitive bidding war for the UK-based producer.
DNO Bows Out of Takeover Race
DNO confirmed its all-cash offer of $5.214 per share will not be increased, a move that hands a decisive advantage to rival bidder Genel Energy. This declaration concludes DNO's pursuit of the Edinburgh-based company.
Genel Energy had previously submitted a higher offer of $436 million, equivalent to $5.74 per share, which had already secured the recommendation of Capricorn's board. With DNO's exit, Genel's proposal now stands as the leading bid.
Market Unwinds 'Auction Premium'
AdThe sharp drop in Capricorn's stock to 427.33 pence reflects the market's reaction to the end of the takeover contest. Investors are unwinding the "auction premium" that had been priced into the shares in anticipation of a higher counter-offer, which has now been ruled out.
Genel's position is further strengthened by irrevocable undertakings it secured from shareholders representing approximately 39.1% of Capricorn's stock. These commitments were contingent on no competing bid exceeding Genel's offer by 10% or more, a threshold DNO's final bid did not meet.
Broader Headwinds Weigh on Stock
The decline in Capricorn's shares was amplified by a weaker broader market. The FTSE 100 index traded lower as investors positioned for an upcoming Bank of England interest rate decision, while retreating crude oil prices added pressure to the energy sector as a whole.
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