North Sea producers Serica Energy and Kistos last night confirmed neither party will make a final bid for the other, drawing a line under a series of unsuccessful takeover moves.

Serica said it would not be carrying forward a potential offer for the share capital of Kistos.

Kistos later stated it too would not be pursuing another bid.

The firm said it was disappointed that, despite its repeated attempts, Serica’s board had “failed to engage meaningfully” with both its proposed offer for Serica or the terms of Serica’s counter offer for Kistos.

Energy Voice says that, under competition rules, each company had until 5pm yesterday to announce whether they would or would not take further offers forward.

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.

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

Kistos reached out to Serica in mid-May to discuss a potential merger, before proposing the deal in writing and later saying the move would create “a leading independent North Sea champion”.

The proposal was rejected by the company's board, though it acknowledged it could see the industrial logic behind the combination.

On July 12, Kistos announced it had rejected a possible counter-offer from Serica on July 8, and tabled a cash-and-share offer that valued Serica at more than £1billion. This too was rejected.

Kistos made a final move on July 22, upping the valuation to £1.15billion.

Serica rejected this too, noting that the revised offer again "significantly" undervalued the company, and did not take account of its investment plans or the outcome of its North Eigg exploration well.

Serica said yesterday: “It has not been possible to reach agreement with Kistos on the terms or structure of a revised possible offer.”

It would continue to “proactively seek opportunities” to use its balance sheet to invest in its existing assets and diversify its portfolio through mergers and acquisitions.

Meanwhile, Kistos added it “remains confident” in the company’s strategic direction and positioning as an independent North Sea producer, and its role as a proactive consolidator in the sector. It added that it will continue to “pursue other paths” to deliver those goals.

FTSE 100

The UK’s top share index, the FTSE 100, was down 17 points at 7,470 shortly after opening this morning, following yesterday’s five-point gain.

Brent crude futures dipped by 0.86% to $95.48 a barrel.

Companies reporting today

  • Half-year results: Admiral Group, Aviva
  • Third-quarter results: TUI, Disney

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