Ratio Petroleum has increased its recommended all-cash offer for Pharos Energy after a competing bid from Serica Energy, with the revised proposal valuing the London-listed oil and gas company at approximately $197 million (£146.4 million).
The revised proposal represents a premium of about 29.2% to Pharos' closing share price on June 23, 2026, the last trading day before Ratio announced its original offer, and is approximately 0.5% higher than the equivalent value of Serica Energy's competing proposal.
Under the increased offer, Pharos shareholders would receive 28.8183 pence per share in cash together with a 4 pence per share special dividend, representing a total value of 32.8183 pence per share. Including the previously paid final dividend for the 2025 financial year of 0.9317 pence per share, shareholders would receive a total of 33.75 pence per share.
Ratio increased its bid after Serica announced an offer for Pharos on July 26. At the time, the Pharos board withdrew its recommendation for Ratio's original proposal and backed Serica's offer, which valued Pharos at about $196 million (£145.7 million) and would have expanded Serica's portfolio into Vietnam and Egypt.
The Serica transaction was also structured as a court-sanctioned scheme of arrangement and remained subject to shareholder, court and regulatory approvals.
According to Ratio, the Pharos board has now unanimously reinstated its recommendation in favor of the increased Ratio offer and withdrawn its recommendation of the Serica proposal.
The Pharos board said it considers the financial terms of the increased Ratio offer to be fair and reasonable and unanimously recommends that shareholders vote in favour of the scheme. The board also said it will not proceed with posting a scheme document relating to the Serica offer.
Ratio added it had received irrevocable undertakings to support the transaction representing approximately 173.9 million Pharos shares, or around 41.76% of the company's issued share capital.
This includes undertakings from Pharos directors holding shares as well as other shareholders. Certain irrevocable undertakings covering approximately 19.55% of the company's share capital will remain binding even if a higher competing offer emerges, while undertakings covering a further 21.63% will also become binding against higher competing offers unless a rival bidder announces an offer at least 15% higher than the increased Ratio proposal before August 11 and Ratio does not match or exceed it within the specified period.
The acquisition will continue to be implemented through a court-sanctioned scheme of arrangement under the UK Companies Act.
Shareholder meetings, originally scheduled for August 17, will be adjourned to allow shareholders additional time to consider the revised proposal, with a new timetable to be announced. The long stop date has also been extended to July 15, 2027.
Ratio said the increased cash consideration will be funded through an expanded irrevocable letter of credit provided by Israel Discount Bank, while noting that longer-term financing may include debt, capital raising or bank financing. The company added that the revised offer does not alter its previously announced strategic plans for Pharos' business, management, employees or operations.