Serica Energy has brought its pursuit of Pharos Energy to a halt, declaring that its 32.67p-per-share offer is final and will not be increased, despite a higher competing bid from Ratio Petroleum Energy which is now firmly in the driver's seat.

In a statement released on Monday, Serica said it remained committed to a "highly disciplined approach to M&A" and confirmed that the terms of its recommended offer, consisting of 28.67p in cash plus a 4p special dividend, would not be raised. The company retains limited rights to revise its proposal should a new third-party bidder emerge or in exceptional circumstances approved by the UK Takeover Panel.

Chris Cox, CEO of Serica said: "Serica continues to rigorously evaluate a pipeline of opportunities, both in the UK North Sea and other areas in which the company can successfully deliver its strategy."

The announcement is the latest twist in a takeover battle that has rapidly evolved over the past six weeks and now appears to favour the Israeli bidder. Pharos and Ratio are both London-based companies and Serica's takeover would have kept Pharos under UK-listed ownership.

The declaration follows a revised proposal from Ratio Petroleum on 7 August that was slightly higher than Serica's offer. Under Ratio's terms, Pharos shareholders would receive approximately 28.82 pence in cash alongside a 4p special dividend, valuing the company at around 32.82 pence per share.

Ratio also disclosed that it had secured irrevocable undertakings covering roughly 41.76% of Pharos's issued share capital, significantly strengthening its position in the contest.

The bidding saga began in late June when Ratio unveiled an initial approach valuing Pharos at up to 28p per share. That proposal appeared to put the Vietnam and Egypt-focused producer on course for a straightforward acquisition until Serica entered the fray on 26 July with a higher recommended cash offer worth 32.67p per share. At the time, Serica's proposal represented a material premium and won the backing of the Pharos board.

However, Ratio then returned with the improved offer last week, prompting Pharos to withdraw its recommendation for the Serica proposal and instead support the revised Ratio bid. Ratio's revised offer values Pharos Energy at approximately £146.4m, only marginally ahead of Serica's £145.7m. By declaring its offer final, Serica has effectively stepped back from the contest, leaving Ratio as the clear frontrunner without a protracted bidding war.

Pharos remains an attractive target. The company produced around 5,650 barrels of oil equivalent per day during the first half of 2026 from assets in Vietnam and Egypt and reported revenue of approximately $82m while maintaining more than $45m of cash on its balance sheet at the end of June. Ongoing drilling campaigns across both countries have also underlined the growth potential underpinning bidder interest.

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