Serica Energy (AIM:SQZ) confirmed the financial terms of its recommended cash offer for Pharos Energy will not be increased, despite a higher rival bid from Ratio Petroleum Energy LP.
Ratio raised its own offer on 7 August, saying it had secured irrevocable undertakings covering roughly 41.76% of Pharos' issued share capital.
Serica's offer, set out on 26 July, remains pitched at 32.6683p per Pharos share, comprising 28.6683p in cash and a 4.0p special dividend.
The UK North Sea-focused oil and gas producer said it takes "a highly disciplined approach to M&A" and is continuing to evaluate other opportunities in the North Sea and elsewhere.
Serica reserved the right to revise its offer only if a third party other than Ratio announces a competing bid for Pharos, or if the Takeover Panel grants consent in what it called wholly exceptional circumstances.
News Intelligence what this means for the company
Serica Energy has declared its 32.6683p-per-share offer for Pharos Energy final and will not raise it, even after Ratio Petroleum tabled a higher bid on 7 August with backing from holders of 41.76% of Pharos shares. The move signals Serica's board is willing to walk away rather than escalate, betting either that Ratio's bid will fail or that other North Sea opportunities justify discipline on price. This is the second phase of a contest that began when Serica announced its offer on 26 July; the outcome now hinges on whether Ratio can convert its shareholder support into a successful takeover or whether a third bidder emerges.
Serica's refusal to raise its bid reflects confidence in its cash position—the company completed a $750m refinancing on 23 July and reported $184m of free cash flow in H1 2026—but it also signals the board sees better returns deploying capital elsewhere in the North Sea rather than overpaying for Pharos. The outcome is now binary: either Serica wins at its stated price, or it pivots to other opportunities. Either way, the disciplined stance reduces downside risk to shareholders from an overstretched acquisition.
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