Genel Energy has rejected a £202m acquisition bid from the Norwegian oil and gas firm, DNO.

The offer, valued at 69 pence a share, represents a 38% premium on the British firm’s closing share price yesterday, with the Norwegian company providing an alternative offer, which each Genel shareholder can elect to receive as a combination of cash and newly issued DNO shares.

DNO believes that its proposal represents a “compelling proposition” for shareholders, with the opportunity to create a stronger company in the Kurdistan region of Iraq, where continuing security and commercial risks make scale and financial robustness “essential success criteria”.

However, Genel stated that the offer “fundamentally undervalues” the company, and it has advised its shareholders to take no action in response to the offer.

Under takeover rules, DNO has until no later than 5pm on 4 September to either announce a firm interion to make an offer or state that it does not intend to make an offer.

Following the rejection, shares in Genel increased by over 20%.

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