DJ Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited
Genel Energy PLC (GENL)
Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited
02-Jul-2026 / 07:00 GMT/BST
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OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
2 July 2026
RECOMMENDED CASH ACQUISITION
of
Capricorn Energy plc ("Capricorn")
by
Genel Energy No.9 Limited ("Bidco")
(a company indirectly owned by Genel Energy plc ("Genel"))
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
-- The boards of Genel, Bidco and Capricorn are pleased to announce that they have reached agreement on the
terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Capricorn
by Bidco (the "Acquisition"). The Acquisition is to be effected by means of a Scottish scheme of arrangement under
Part 26 of the Companies Act (the "Scheme").
-- Under the terms of the Acquisition, each Capricorn Shareholder shall be entitled to receive, in
aggregate:
USUSD4.74 in cash for each Capricorn Share held (the "Acquisition Value").
-- The Acquisition Value comprises, for each Capricorn Share:
-- USUSD3.75 in cash (the "Acquisition Price"); and
-- a special dividend of USUSD0.99, which is intended and expected to be declared prior to the Effective Date
(the "Permitted Dividend").
-- The Sterling equivalent value of the Acquisition Value, being 357 pence per Capricorn Share based on the
Announcement Exchange Rate, represents a premium of approximately:
-- 34 per cent. to the closing price per Capricorn Share of 266 pence on 10 March 2026 (being the day prior
to the start of the Offer Period (the "Undisturbed Date")); and
-- 48 per cent. to the volume weighted average price per Capricorn Share of 241 pence during the three-month
period ended on the Undisturbed Date.
-- The Acquisition Value (assuming the Permitted Dividend is declared and paid in full) implies a value for
the entire issued and to be issued ordinary share capital of Capricorn of approximately USUSD360 million on a fully
diluted basis, which is equivalent to GBP271 million based on the Announcement Exchange Rate.
-- The Acquisition Price payable under the Acquisition is expressed in USUSD. The USUSD denominated Acquisition
Price reflects the underlying characteristics of Capricorn's business activities, which are largely denominated in
USUSD.
-- A facility will be made available under which Capricorn Shareholders will be able to elect (subject to
the terms and conditions of such facility) to receive the cash consideration payable in connection with the
Acquisition Price in Sterling (after, if applicable, deduction of any transaction or dealing costs (including any
taxes) associated with the currency conversion) at the applicable market exchange rate at which the conversion
takes place (the "Foreign Exchange Facility"). The applicable market exchange rate will be fixed on the latest
practicable date prior to the relevant payment date. The amount received by any Capricorn Shareholder validly
electing to be paid their cash consideration payable in connection with the Acquisition Price in Sterling may
therefore be below or above 282 pence per Capricorn Share depending on the applicable market exchange rate that is
applied and the deduction of any transaction or dealing costs (including any taxes) associated with the currency
conversion. Further details of the Foreign Exchange Facility and the election to be made by Capricorn Shareholders
who wish to receive their cash consideration payable in connection with the Acquisition Price in Sterling using the
Foreign Exchange Facility will be set out in the Scheme Document and the applicable Form(s) of Election.
Permitted Dividend
-- As part of the Acquisition, the boards of Genel, Bidco and Capricorn have agreed to the declaration and
payment of the Permitted Dividend. The Permitted Dividend is intended and expected to be declared by the Capricorn
Board prior to the Effective Date, and will only be payable if the Scheme becomes Effective (or, if the Acquisition
is implemented by way of a Takeover Offer and continues to be recommended by the Capricorn Board, the Takeover
Offer becomes or is declared unconditional) to Capricorn Shareholders on the register of members at the Scheme
Record Time (or, if the Acquisition is implemented by way of a Takeover Offer and continues to be recommended by
the Capricorn Board, on the register of members on the date on which the Takeover Offer becomes or is declared
unconditional).
-- Capricorn Shareholders will note that the quantum of the Permitted Dividend represents an aggregate
payment to shareholders of approximately USD75 million. Although subject at the relevant time to compliance with
applicable statutory requirements, the Capricorn Board has concluded, based on analysis carried out prior to the
date of this announcement, that in all reasonable circumstances Capricorn will have available to it sufficient cash
resources to pay the Permitted Dividend in full.
-- However, Capricorn Shareholders should note that the ability of the Capricorn Board lawfully to declare
and pay the Permitted Dividend is subject to various factors outside their control and events may occur that result
in the Capricorn Board concluding that it is no longer able to declare and pay the Permitted Dividend in full. If
certain circumstances as set out in further detail in paragraph 13 of this announcement were to occur, the
Capricorn Directors would consider all options available to them, including whether it is in the best interests of
Capricorn Shareholders to continue to implement the Scheme, which may result in the Scheme not becoming Effective.
If, whether as a result of the Permitted Dividend not being paid in full or otherwise, the Acquisition does not
become Effective, the Permitted Dividend will not be paid.
-- Genel, Bidco and Capricorn have agreed that the Capricorn Board may declare and pay the Permitted
Dividend without any reduction to the Acquisition Price. If, on or after the date of this announcement and prior to
the Effective Date, any dividend, distribution, or other return of value or excess is declared, made, or paid or
becomes payable by Capricorn (other than, or in excess of the amount of, the Permitted Dividend), Bidco reserves
the right to reduce the Acquisition Price payable under the terms of the Acquisition for the Capricorn Shares by an
amount equal to the amount of any such dividend, distribution or other return of value or excess. In such
circumstances, the Capricorn Shareholders shall be entitled to retain any such dividend, distribution, or other
return of value declared, made, or paid.
-- If declared, the Permitted Dividend will be paid to Capricorn Shareholders in Sterling, with the amount
paid to Capricorn Shareholders being the Sterling equivalent of USUSD0.99 per Capricorn Share based on the prevailing
exchange rate on the latest practicable date for fixing such rate prior to the relevant payment date.
-- If declared, the Permitted Dividend will be paid not more than 14 days after the Effective Date and in
the manner to be specified in the Scheme Document. Further details are set out in paragraph 13 of this
announcement.
Timetable and conditions
-- It is intended that the Acquisition shall be effected by means of a Scottish Court-approved scheme of
arrangement between Capricorn and Capricorn Shareholders under Part 26 of the Companies Act although Bidco reserves
the right to implement the Acquisition by means of a Takeover Offer (subject to Panel consent and the terms of the
Co-operation Agreement).
-- The Acquisition is conditional on the approval of Capricorn Shareholders and subject to the further
Conditions and terms set out in Appendix I to this announcement (which shall be set out in full in the Scheme
Document).
-- The Acquisition shall be put to Capricorn Shareholders at the Court Meeting and at the General Meeting.
In order to become Effective, the Scheme must be approved by a majority in number of the Capricorn Shareholders
voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the
Capricorn Shares voted. In addition, a special resolution implementing the Scheme must be passed by Capricorn
Shareholders representing at least 75 per cent. of votes cast at the General Meeting.
-- The Scheme Document, containing further information about the Acquisition and notices of the Court
Meeting and the General Meeting, shall be published within 28 days of the date of this announcement.
-- Consistent with Genel's approach to constructive, collaborative and respectful stakeholder relationships,
Bidco and Genel (in co-operation with Capricorn) have already initiated discussions with the Egyptian Government to
emphasise Bidco and Genel's commitment to Egypt and to developing a good working relationship with the Egyptian
Government. In the context of the importance of developing a good working relationship with the Egyptian
Government, Genel and Bidco will be seeking the consent of EGPC to the Acquisition. Notwithstanding the positive
engagement with the Egyptian Government to date, Capricorn Shareholders' attention is specifically drawn to the
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DJ Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited -2-
Egyptian Condition, its importance to Bidco and Genel and the rationale for its inclusion (as set out in more
detail in paragraph 15 below).
-- The Egyptian Condition has been included at Genel's request, for the reasons stated above and to take
account of the particular circumstances of the Acquisition following negotiation between Genel and Capricorn.
-- Capricorn Shareholders and Genel Shareholders should note that Genel intends to seek the Panel's consent
to invoke the Egyptian Condition in accordance with Rule 13.5(a) of the Takeover Code if the Egyptian Condition is
not satisfied or capable of being satisfied by the Long-stop Date. A decision by the Panel whether to permit Genel
to invoke a Condition would be judged by the Panel by reference to the facts at the time that the relevant
circumstances arise, including the views of the Capricorn Directors at the time.
-- It is expected that the Scheme will become Effective (subject to the satisfaction of the Conditions)
during the second half of 2026.
Capricorn recommendation
-- The Capricorn Directors, who have been so advised by Canaccord Genuity as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the
Capricorn Directors, Canaccord Genuity has taken into account the commercial assessments of the Capricorn
Directors. Canaccord Genuity is providing independent financial advice to the Capricorn Directors for the purposes
of Rule 3 of the Code.
-- Accordingly, the Capricorn Directors intend to recommend unanimously that Capricorn Shareholders vote in
favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, as the
Capricorn Director who holds Capricorn Shares has irrevocably undertaken to do in respect of his own beneficial
holdings of 4,395 Capricorn Shares representing, in aggregate, approximately 0.006 per cent. of the share capital
of Capricorn in issue on 1 July 2026 (being the latest practicable date prior to this announcement).
-- Bidco has also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and
the resolutions to be proposed at the General Meeting from Palliser Capital (UK) Ltd, Newtyn Management, LLC, Kite
Lake Capital Management (UK) LLP, and Madison Avenue Partners, LP in respect of a total of 27,749,043 Capricorn
Shares representing, in aggregate, approximately 39.3% of Capricorn's issued share capital.
-- Bidco has therefore received irrevocable undertakings in respect of a total of 27,753,438 Capricorn
Shares representing, in aggregate, approximately 39.3% of Capricorn's share capital in issue on 1 July 2026 (being
the latest practicable date prior to this announcement).
Further details of these irrevocable undertakings, including the circumstances in which they cease to be binding, are
set out in Appendix III to this announcement.
Background to and reasons for the Acquisition
-- Genel's strategy is to build a business with resilient diversified cash flows that deliver sustainable
value to shareholders. The Genel Board and Genel management are resolute in their belief that this can best be
achieved through strategic acquisitions which add substantial high-quality producing assets to its existing
portfolio.
-- Genel's existing production base consists of its 25% non-operated working interest in the Tawke PSC,
located in the Kurdistan Region of Iraq, which generates significant free cash flow from production averaging
17,520 bopd for the full year of 2025 (20,000 bopd exit rate in December 2025) and industry leading operating costs
of around USD4/bbl. It is comprised of two very high-quality fields, Tawke and Peshkabir, which in combination
represent a world class licence.
-- Genel has been seeking to acquire new production assets in preferred geographies that it has identified
to build-out a significant and diverse strategic footprint.
-- Egypt was identified as one of Genel's focus countries to expand its footprint and Genel has tracked and
evaluated numerous opportunities in the country.
-- After conducting a detailed review of Capricorn's assets and operations, the Genel Board and Genel
management have determined that an acquisition of the Egyptian Western Desert portfolio represents an attractive
strategic pillar to its business. The combined business is a larger, more diversified MENA-focused exploration &
production company with a strong, resilient production base from a number of significant oil and gas fields. The
cash generation from the baseline production business is significant, with an expectation that 2P reserves will be
replaced and increased from the extensive portfolio of further resource opportunities.
-- More specifically, key benefits include:
- Scale and diversification:
- The Acquisition will create an independent energy company of scale in the MENA region with a
strong, low leverage balance sheet, significant production, reserves and resource upside.
- The Enlarged Group will hold a geographically diversified production base, with pro-forma 2P
reserves of 117 mmboe and production of 41,003 bopd (combined December 2025 exit rate) (split evenly
between Kurdistan and Egypt).
- The addition of the Egyptian portfolio to Genel's existing Kurdistan production adds material
production of both oil and gas in a new country, with a well-established regulatory regime, stable
contracts and attractive fiscal terms. This represents a significant step towards its targeted
diversification of resilient, sustainable cash generation.
- Reserves and Resources growth:
- The resources and potential resources of the Enlarged Group offers significant opportunity for
reserves replacement and growth in Egypt and Kurdistan, as well as the build-out of a further production
hub in Oman and/or Somaliland.
- The Enlarged Group will have the financial capability and appetite to allocate capital to
derisking the potential asset base in an efficient and timely manner in order to maximise value delivery to
its shareholders.
- The Enlarged Group is well positioned to pursue further value-accretive M&A within Egypt and the
MENA region more generally.
- Complementary technical capabilities:
- Genel has extensive experience across its operated and non-operated assets in MENA and Africa
throughout its 20+ year history in the region, as well as experience from senior staff in other
jurisdictions. Its team has experience in delivering complex projects on time and on budget, with key
features being pace of development and maximisation of capital efficiency.
- It has developed a deep understanding of the technical, commercial and stakeholder dynamics that
characterise operating in government-partnered upstream environments. Genel's experienced technical and
operational teams are well placed to work constructively with Capricorn's partner Cheiron, and with EGPC
and BAPETCo, to support the continued development and optimisation of the Egyptian portfolio.
- The Enlarged Group will benefit from the skill sets of both management teams, with Genel's track
record of reservoir management, production optimisation and non-operated asset stewardship providing a
complementary platform to Capricorn's existing technical engagement with its Egyptian partners.
- Together, the Enlarged Group will be better positioned to accelerate development activity across
all Egyptian concessions, working with EGPC to develop the appropriate subsurface and operational activity
set to commercialise both the currently estimated remaining 2P reserves and the significant contingent
resource base that remains to be converted into 2P reserves.
Information on Genel and Bidco
Bidco
Bidco is a limited company registered in England and Wales and incorporated on 19 May 2026. Bidco is a wholly owned
indirect subsidiary of Genel. Bidco was formed for the purposes of the Acquisition and has not traded since its date of
incorporation, nor has it entered into any obligations other than in connection with the Acquisition. Further details
in relation to Bidco will be contained in the Scheme Document.
Genel
Genel is a socially responsible oil producer, with a portfolio of production and exploration assets, including
production assets in the Kurdistan Region of Iraq and exploration licences in Oman and Somaliland.
Genel's strategy comprises three objectives designed to build a business with resilient and diversified cash flows that
deliver sustainable value to shareholders, and with the aim of restarting the payment of a regular dividend: (i) a
strong balance sheet, (ii) diversified and resilient cash generation, and (iii) investment in new cash flows.
The Genel business is a resilient, cash-generative platform with significant unvalued potential. For the financial year
ended 31 December 2025, Genel generated 17,520 bopd in working interest production, with an EBITDAX of USUSD43 million
(2024: USUSD1 million).
Genel Shares are listed on the Official List and admitted to trading on the Main Market of the London Stock Exchange.
Information on Capricorn
Capricorn, a Scottish public limited company, headquartered in Edinburgh, is an independent energy company which has
been listed on the Main Market of the London Stock Exchange for more than 30 years.
Currently, Capricorn's core operations are in Egypt's Western Desert, where it holds a portfolio of onshore development
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DJ Genel Energy PLC: RECOMMENDED CASH ACQUISITION of Capricorn Energy plc by Genel Energy No.9 Limited -3-
and production assets. In May 2025, Capricorn agreed with EGPC to consolidate eight of its 50:50 jointly owned
concessions into a single, integrated licence with enhanced commercial terms, providing a platform for future growth.
On 30 March 2026, Capricorn announced that it had received formal parliamentary ratification of this agreement.
In addition to maximising value from its assets in Egypt, from 2023 onwards Capricorn has been focused on streamlining
operations, reducing costs and has returned around USD600 million to shareholders.
Furthermore, Capricorn has a stated strategy to explore new value-accretive opportunities, in Egypt, the UK North Sea
and the broader MENA region.
Commenting on the Acquisition, Randy Neely, Chief Executive Officer of Capricorn, said:
"Since my appointment three years ago, the team has delivered strongly against our strategic priorities - returning
approximately USUSD600 million to shareholders, reducing costs, and maximising value from our Egyptian asset base through
the recently signed merged concession, establishing a sustainable long-term business. However, Capricorn requires
greater scale to materially improve trading liquidity. We believe the transaction with Genel crystallises the value
created by Capricorn while providing shareholders with a clear and efficient exit."
Commenting on the Acquisition, Paul Weir, Chief Executive Officer of Genel, said:
"Today we announce a landmark transaction to acquire a leading oil and gas portfolio in Egypt - a move that delivers
our strategic intent, reshapes our company's growth trajectory, diversifies our portfolio of oil and gas fields and
begins our role as a partner in Egypt's energy future. The acquisition of Capricorn Energy and its portfolio brings
high-quality assets, material reserves, and a talented local workforce that together create immediate scale and
opportunity for further onward investment and growth. By applying our technical and operational capabilities to these
assets, we will work with the operator to accelerate production optimisation, replace reserves, reduce unit costs, and
capture significant near-term cash flow while preserving optionality for future development.
Equally important, this transaction commences the start of a relationship with and commitment to Egypt and its
communities. We will work closely with government partners and host communities to ensure safe, environmentally
responsible operations and to maximise local content and job creation.
For our shareholders, the acquisition is expected to realise accretive cash flow and returns over the coming years. For
our employees and those joining from the Capricorn team, it creates new opportunities to grow and to apply best
practices across a larger, more diversified asset base.
We enter this next chapter of further value creation with resolve and determination. Delivering on the promise of this
transaction will require a high degree of expertise, rigorous execution, transparent engagement with stakeholders, and
an unwavering commitment to safety and sustainability. I am confident that we will realise the full potential of these
assets and create sustainable value for all our stakeholders."
This summary should be read in conjunction with the full text of this announcement. The Acquisition shall be subject to
the Conditions and further terms set out in Appendix I to this announcement and to the full terms and conditions which
shall be set out in the Scheme Document. Appendix II to this announcement contains the sources of information and bases
of calculations of certain information contained in this announcement, Appendix III contains a summary of the
irrevocable undertakings received in relation to this Acquisition and Appendix IV contains definitions of certain
expressions used in this summary and in this announcement.
Enquiries:
Genel +44 20 7659 5100
Paul Weir
Chief Executive Officer
Luke Clements
Chief Financial Officer
PJT Partners (UK) Limited, financial adviser to Bidco and Genel +44 20 3650 1100
Ben Monaghan
Jonathan Hall
Marc de Robillard
Genel Analyst/Investor Enquiries +44 20 7659 5100
Chief Financial Officer
Luke Clements
Vigo Communications, PR adviser to Genel +44 20 7830 9700
Patrick d'Ancona
Capricorn +44 131 475 3000
Randy Neely Chief Executive
Nathan Piper
Commercial Director
Canaccord Genuity Limited, financial adviser and Rule 3 adviser to Capricorn +44 20 7523 8000
Henry Fitzgerald-O'Connor
George Grainger
Moelis, financial adviser to Capricorn
+44 20 7634 3500
Chris Raff
Ali Hassen
Camarco, PR adviser to Capricorn
Georgia Edmonds +44 20 3757 4980
Violet Wilson
Fergus Young
Linklaters LLP are retained as legal advisers to Genel and Bidco.
Ashurst Perkins Coie UK LLP are retained as legal advisers to Capricorn.
Inside Information
The information contained within this announcement is deemed by Genel and Capricorn to constitute inside information as stipulated under the Market Abuse Regulation (EU) no. 596/2014 (as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018). On the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
The person responsible for arranging the release of this announcement on behalf of Genel is Chandni Karania, Company Secretary and on behalf of Capricorn is Paul Ervine, Company Secretary.
Important Notices
PJT Partners (UK) Limited ("PJT Partners"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to Bidco and Genel and no one else in connection with the Acquisition and will not be responsible to anyone other than Bidco and Genel for providing the protections afforded to clients of PJT Partners nor for providing advice in connection with the Acquisition. Neither PJT Partners nor any of its subsidiaries, branches or affiliates nor any of their respective directors, officers, employees, agents or representatives owes or accepts any duty, liability or responsibility (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of PJT Partners in connection with the Acquisition, any statement contained herein or otherwise.
Canaccord Genuity, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser and Rule 3 adviser to Capricorn and no one else in connection with the Acquisition and will not be responsible to anyone other than Capricorn for providing the protections afforded to clients of Canaccord Genuity nor for providing advice in relation to the Acquisition or any other matters referred to in this Announcement. Neither Canaccord Genuity nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Canaccord Genuity in connection with this Announcement, any statement contained herein or otherwise.
Moelis, which is regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to Capricorn and no one else in connection with the Acquisition and other matters set out in this announcement and will not be responsible to anyone other than Capricorn for providing the protections afforded to clients of Moelis, or for providing advice in connection with the Acquisition or any matter referred to herein. Neither Moelis nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Moelis in connection with this announcement, any statement contained herein or otherwise.
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