Serica Energy to Acquire Pharos in £145.7M Deal, Outbidding Rival Ratio

Serica Energy has reached an agreement to acquire Pharos Energy in a cash deal valued at approximately £145.7 million, topping a rival bid and sending the target company's shares surging to their highest point in 2026.

The board of Pharos unanimously withdrew its recommendation for a competing offer from Ratio and now intends to unanimously recommend Serica's acquisition to its shareholders, according to a joint statement.

Details of the Winning Offer

Under the terms of the deal, which will be structured as a scheme of arrangement, Pharos shareholders are set to receive a total of 32.6683 pence per share. This is composed of 28.6683 pence in cash from Serica and a 4 pence per share special dividend paid from Pharos's existing cash resources.

The offer represents a significant premium over competing and previous valuations:

• It is a 20.7% premium to the aggregate consideration offered by Ratio.
• It is a 28.6% premium to the undisturbed closing price of Pharos shares on June 23, 2026, the last business day before the Ratio offer was announced.

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Serica also stated it has secured an irrevocable undertaking to vote in favor of the deal from Aberforth Partners LLP, which holds approximately 14.26% of Pharos shares.

Market Reaction and Next Steps

Investors reacted swiftly to the news on Monday. Shares in Pharos Energy (LON:PHARP) jumped by as much as 33.9%, reflecting the premium offered in the new deal. Conversely, shares in the acquirer, Serica Energy (LON:SQZ), fell by as much as 5.8%, a typical market response as investors weigh the cost of the acquisition.

Pharos has announced it will adjourn the shareholder meetings previously scheduled for August 17 to vote on the Ratio offer. The acquisition by Serica remains conditional on regulatory approvals in Vietnam and Egypt, among other conditions, and is expected to be finalized in the first half of 2027.