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(Sharecast News) - Serica confirmed on Friday that it is in talks with EnQuest about a possible combination.
Responding to recent media speculation, it said: "The board of Serica believes there are substantial potential benefits to the possible transaction, including increasing scale and diversification, unlocking significant synergies and providing a stronger platform for further growth."
The AIM-listed oil and gas company said that although discussions are ongoing, it is currently envisaged that the potential transaction will be structured as an all-share offer by EnQuest for Serica by way of a reverse takeover under UK listing rules.
This would involve a return of capital to existing Serica shareholders conditional upon completion of the possible deal and that Serica shareholders would hold a majority of the shares in the enlarged company, with shares listed on the ESCC market of the London Stock Exchange.
There can be no certainty either that an offer will be made, nor as to the terms on which such offer will be made, Serica added.
At 0955 GMT, Serica shares were up 6.3% at 128.08p, while EnQuest was 9.4% higher at 11.92p.
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