Xtellus Capital Partners moves to take Serinus Energy private in £5.1m acquisition

Xtellus Capital Partners has announced plans to acquire Serinus Energy in a deal worth £5.1 million, marking a strategic move in the oil and gas sector. The transaction will be conducted through a court-sanctioned Scheme of Arrangement under Jersey corporate law, allowing the complete buyout of Serinus Energy’s issued and to-be-issued share capital. Shareholders are set to receive 3.40 pence per share, representing a 30.8% premium to the company’s last closing price before the announcement.

The acquisition follows a prolonged period of undervaluation and market struggles for Serinus Energy, which has failed to gain significant traction despite executing its operational strategy. Xtellus sees this as an opportunity to deploy private capital to strengthen Serinus Energy’s assets while eliminating the financial burdens associated with maintaining a public listing on AIM and the Warsaw Stock Exchange (WSE).

What Does This Mean for Serinus Energy Shareholders?

For shareholders, the acquisition provides a premium exit opportunity in what has been a turbulent trading period for Serinus Energy. The offer price of 3.40 pence per share represents a 30.8% increase from the closing price on March 21, 2025, a 41.7% premium compared to the February 7 closing price, and a 33.3% uplift over the 30-day volume-weighted average price.

This buyout comes amid a challenging financial landscape for Serinus Energy. The company’s stock has fluctuated significantly, hitting a 52-week low of 1.86 pence in August 2024 before recovering to 3.25 pence by March 24, 2025. However, the stock remains well below its 52-week high of 4.80 pence, reflecting the broader struggles of UK-listed small-cap oil and gas firms.

The financials further underscore the company’s difficulties. In its latest full-year earnings report for 2024, Serinus Energy posted a loss of 8.5 pence per share, a stark contrast to the 1.4 pence per share profit recorded in the previous year. This decline has weighed heavily on investor sentiment, reinforcing the appeal of a cash acquisition that offers immediate liquidity to shareholders.

Why Is Xtellus Capital Partners Taking Serinus Energy Private?

Xtellus Capital Partners has identified small-cap oil and gas companies as an undervalued segment of the market, with low share prices failing to reflect asset potential. The withdrawal of capital from these stocks, coupled with declining public market interest, has created an opportunity for private equity firms to step in.

Serinus Energy, despite executing its business plan, has seen little market recognition for its efforts. The company’s market capitalization of £19.19 million as of March 2025 reflects an 89.13% decline since May 2018, highlighting its struggle to maintain investor confidence. Meanwhile, the costs of remaining publicly listed—such as regulatory expenses and investor relations obligations—have added to financial pressures.

By transitioning Serinus Energy into a privately held entity, Xtellus aims to remove these constraints, allowing the company to refocus on asset development and expansion. With access to private capital, Serinus Energy would have greater financial flexibility to pursue growth opportunities beyond its current limitations.

How Will the Acquisition Be Funded and Executed?

Xtellus Capital Partners has confirmed that the full cash consideration for the acquisition will be financed through cash reserves on its balance sheet, ensuring that the deal does not rely on external funding. The transaction will be executed through a Scheme of Arrangement, which requires approval from Serinus Energy shareholders, the Jersey courts, and regulatory bodies.

A significant portion of Serinus Energy’s existing shareholders have already committed their support. The Serinus board of directors, collectively holding 4.59% of the company’s shares, has provided irrevocable undertakings to vote in favor of the deal. Additionally, other major shareholders, representing 9.81% of shares outstanding, have also pledged their backing. In total, 14.4% of Serinus Energy’s shares are already committed to the acquisition.

Regulatory approval will be required from the National Agency for Mineral Resources in Romania to ensure that Serinus Energy’s Petroleum Concession Agreement remains valid. The Romanian Competition Council must also authorize the foreign direct investment component of the deal. Once these conditions are met, the transaction is expected to close in the second quarter of 2025.

What Are Analysts Saying About the Deal?

The proposed acquisition has prompted mixed reactions from market analysts. On one hand, short-term investors may see potential for minor share price gains as the stock moves closer to the 3.40 pence acquisition price. On the other hand, long-term investors who have faced significant losses may consider the buyout as a rational exit strategy given the company’s declining financial position.

Market sentiment surrounding Serinus Energy has been largely negative due to widening financial losses and stock volatility. The company’s stock performance has remained below expectations, and the lack of institutional support has hindered its ability to raise new capital. Some analysts suggest that selling at the offered premium may be the most viable option for investors, particularly those seeking to mitigate risk in an uncertain sector.

For Xtellus Capital Partners, the move represents a calculated expansion into the oil and gas sector, where private equity firms are increasingly looking to capitalize on undervalued assets. By acquiring Serinus Energy at a depressed valuation, Xtellus may aim to restructure and reposition the business for long-term profitability outside of public market pressures.

What’s Next for Serinus Energy?

If the acquisition proceeds as planned, Serinus Energy will delist from AIM and WSE, marking the end of its tenure as a publicly traded company. While this means that investors will no longer have access to publicly traded shares, it also signals a shift towards a new strategic direction under private ownership.

For existing shareholders, the deal offers an opportunity to cash out at a premium, particularly given the company’s ongoing financial struggles. For Xtellus, the acquisition presents a long-term investment that could unlock greater asset potential through strategic funding and restructuring.

With regulatory approvals and shareholder votes still pending, the focus now shifts to the timing of the deal’s completion and the broader implications for UK-listed small-cap oil and gas firms facing similar valuation pressures. The outcome of this transaction could set a precedent for future takeovers in the energy sector, as private investors continue to identify opportunities in undervalued public companies.