Pharos Energy shareholders set for 17 August court and general meetings as scheme document published for recommended all-cash acquisition by Ratio Petroleum
Pharos Energy, whose shares trade on a European exchange, has published its formal Scheme Document for the recommended all-cash acquisition by Ratio Petroleum Energy LP, with shareholder court and general meetings now scheduled for 17 August 2026. The acquisition is structured as a scheme of arrangement under English law. Under the terms of the offer, Pharos shareholders are entitled to receive a total value of up to 28 pence per share, comprising a 23.0683 pence cash consideration from Ratio, a 4.0 pence special dividend, and a 0.9317 pence final dividend already paid in July. The board has unanimously recommended shareholders vote in favour, and irrevocable undertakings covering approximately 41.76 percent of Pharos's share capital have already been secured, substantially de-risking the outcome ahead of the vote. The publication of the Scheme Document marks a key procedural milestone, confirming the deal is advancing toward expected completion in the first half of 2027. Supporting the board's recommendation, Pharos's mid-July trading update showed group production of 5,650 boepd (barrels of oil equivalent per day) net, in line with full-year guidance, group revenue of $82 million, and cash balances of $45.2 million as of 30 June 2026. The Egypt receivable balance also fell materially, strengthening the balance sheet ahead of the vote.
Why this matters
This is a cross-border public M&A transaction involving an internationally active oil and gas company, structured under English law as a scheme of arrangement. The cross-border dimension, with Ratio Petroleum as acquirer and Pharos's assets concentrated outside the UK, makes this representative of the international dealmaking that London-listed or London-law transactions facilitate. Securing irrevocable undertakings from holders of over 41 percent of the target's share capital before the scheme document is even published is a strong risk-management step, materially reducing vote uncertainty. The total consideration structure combining a cash consideration, special dividend, and already-paid final dividend is a common feature of energy sector take-privates where the target has distributable cash on its balance sheet that can be returned ahead of scheme completion. Public M&A and energy sector lawyers are the primary advisers activated here.
On the Ground
A trainee on the target side of this scheme would be cross-checking the Scheme Document against the original announcement to verify all defined terms are consistent, tracking the irrevocable undertaking tally against the statutory thresholds required for the Court Meeting, and preparing local counsel instruction letters for any jurisdictions where Pharos holds licences that require regulatory notification of the change of control.
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“Why do acquirers seek irrevocable undertakings before posting a scheme document, and what thresholds must a scheme of arrangement meet to become effective?”
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