North Sea firm Serica Energy has knocked back a new bid from rival Kistos worth £1.15billion.

The fresh offer would have seen Andrew Austin, executive director of Kistos, become chief executive of the combined business - replacing Serica CEO Mitch Flegg - but retaining Serica's Tony Craven Walker as chairman.

Energy Voice says that, after rejection to the £1billion bid on July 12, Kistos wrote to Serica on July 22 with the updated proposal which has now also been declined.

The plan would have offered 0.4 new Kistos shares for each Serica share plus cash of 213p.

Kistos said this equated to a revised offer of 425p per Serica share - representing a premium of 357p as of the closing price on July 22.

Serica, which rejected the last offer due to it "undervaluing" the company, noted the 11% increase but said the brunt of that rise was driven by the rise in Kistos' share price since July 11.

It said the move would see a change in leadership "during a crucial period for the industry" and praised its management team for a 1,120% share price rise over the last five years.

Serica said the revised offer once again "significantly undervalues" the company, taking no account for its investment plans or its potential high-impact North Eigg exploration well.

Unanimous rejection

It added: "Following careful consideration, the board of Serica, together with its financial advisers, has unanimously rejected the Kistos revised possible offer.

"The board reiterates its position that it will not recommend any deal on terms which it believes are unattractive to its shareholders and wider stakeholders.

"Serica shareholders are strongly advised not to take any action."

Serica, with offices in London and Aberdeen, operates the Bruce, Keith and Rhum producing assets in the UK northern North Sea. It also operates the Columbus field and is a partner in the Erskine field in the UK central North Sea.

Kristos, with a base in London, operates a number of exploration and production licenses in the Netherlands,

The firm previously said that the union of the two companies would make strong industrial logic, unlocking value creation and scale.

It described the potential merger as creating "a leading independent North Sea champion".

Serica is on record as saying it wants an M&A deal to deliver growth.

However, earlier this month it said the board "will not recommend any deal on terms which it believes are unattractive to its shareholders and wider stakeholders.".

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The UK's top share index, the FTSE 100, was up 37 points at 7,344 shortly after opening this morning, following yesterday's 29-point gain.

Brent crude futures were 1.66% higher at $106.90 a barrel.

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