Genel Energy has agreed to acquire Capricorn Energy for $436m (£330m), outbidding a previously agreed $396m (£292m) takeover offer from Norwegian oil company DNO.

Under the revised terms released to the market on Friday, Capricorn shareholders will receive $5.74 per share, comprising $4.75 in cash and a $0.99 special dividend. The offer represents a premium of around 10% to DNO's proposal and a 63% premium to Capricorn's closing share price on 10 March, before the takeover process began.

Capricorn's board has withdrawn its recommendation for DNO's bid after concluding that Genel's improved proposal is "fair and reasonable". The higher offer came after DNO sweetened its own takeover terms on 17 September, intensifying a bidding battle for the Edinburgh-based oil and gas producer.

Edinburgh-based Capricorn, which has significant operations in Egypt, has also secured the backing of shareholders representing around 39.1% of its issued share capital in support of Genel's revised offer.

The agreement is the latest twist in the takeover contest between the two London-listed energy companies, with Genel regaining the support of Capricorn's board after briefly being overtaken by DNO's rival bid.

Capricorn Energy shares were up around 12% on Friday morning, reaching about £4.43, a more than 15-year high, while Genel Energy shares fell around 2% on the day.

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