CEEMEA Corporates Today: DNO

Research evidence excerpt

J P M O R G A N

CEEMEA Credit Research

07 August 2026

CEEMEA Corporates Today

DNO

EM CEEMEA Corporate Research

News

Nikhil Bhat, CFA AC

DNO approaches Genel Energy with a possible acquisition offer

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Performance charts - as of Aug 6

Prices in this Note are as of the time of writing on Aug 7th.

Middle East & Africa

DNO approaches Genel Energy with a possible acquisition offer

DNO has approached Genel’s Board with a possible cash offer (with alternative

cash + stock offer) to acquire the entire issued equity of Genel Energy for ~£202mn

(~$272mn) or an enterprise value of ~$173mn. Genel’s Board rejected the offer on

August 4th, while DNO says it is willing to engage with Genel on the proposal. As

per UK Takeover Code, by September 4th, DNO must either announce a firm

intention to make an offer for Genel or announce that it does not intend to make an

offer.

Our view: DNO’s offer is potentially opportunistic, considering Genel’s only cashgenerating asset is in Kurdistan (25% working interest in Tawke license – operated

by DNO with 75% interest), whose production has been curtailed on the back of

the ongoing Middle East conflict. Assuming the acquisition goes ahead at the

above valuation, we see DNO’s increased exposure to Kurdistan will help fund the

company’s ambitious field development plans in the North Sea. While Genel’s net

cash balance sheet could help de-lever DNO’s (even after accounting for cash

acquisition cost), we also see potential for cost synergies given (i) the overlap in

DNO and Genel’s producing assets, and (ii) Genel spending ~$17mn in cash G&A

over 2025 (over a third of DNO’s $49mn) despite the company’s total FY25

production and 2P reserves being only 16-17% of DNO’s.

DNO’s offer is not conditional on Genel’s offer to acquire Capricorn Energy (about

20kbopd production in onshore Egypt) for $360mn. DNO, in its release, noted that

‘a number of third parties have announced possible offers for Capricorn and there

can be no certainty that Genel’s offer for Capricorn will be successful’.

We are Overweight DNO 30s (offered 104.5, z+280) and 10.75% hybrids (offered

108.25, z+439). Our preference in the DNO curve is for the hybrids, which trade

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