ShaMaran Petroleum and Gulf Keystone Petroleum have agreed a merger valuing ShaMaran’s equity at approximately USD 601 million, but the headline premium tells only part of the story. A planned USD 50 million dividend reserved for existing Gulf Keystone shareholders puts the dividend-adjusted premium at 13.5%, compared with the headline 22.9%.
The deal, announced on 20 October 2026, would give each company’s shareholders approximately 50% of the combined business. The cash entitlement is different: only existing Gulf Keystone shareholders would receive the special dividend, which remains subject to applicable Bermuda law, the company’s bye-laws and board approval.
ShaMaran shareholders would receive 0.07533958 newly issued Gulf Keystone shares for each share held. The headline premium uses Gulf Keystone’s GBp 225 closing price on 19 October 2026. The intended special dividend is stated as equivalent to USD 0.23 per Gulf Keystone share.
ShaMaran shareholders would receive shares in the surviving Gulf Keystone, while the intended cash distribution is reserved for Gulf Keystone’s existing shareholders. The 22.9% premium uses the reference share price; the 13.5% comparison adjusts for that separate distribution. The exchange ratio remains 0.07533958 Gulf Keystone shares for each ShaMaran share. Approximately equal ownership therefore describes the allocation of shares after completion, while the special dividend separately determines which existing shareholders receive cash.
That distribution is expressly accommodated in the pre-merger undertakings. Restrictions on shareholder distributions contain an exception for Gulf Keystone’s special dividend. Separate exceptions permit dividends of up to USD 25,000,000 per company if completion has not occurred by 15 March 2027, and an additional USD 25,000,000 per company if it has not occurred by 23 August 2027.
The proposed consideration also needs to be distinguished from the companies’ financing plans. Completion is not conditional on financing because the merger consideration consists entirely of newly issued ordinary shares. ShaMaran nevertheless contemplates refinancing its 2029 bond, with approximately USD 144 million outstanding, while Gulf Keystone is considering a bond issue. Relevant bond acceleration or mandatory redemption with a material adverse financial effect remains covered by contractual completion protections.
Both boards unanimously support the proposal. The Lundin family, through Nemesia S.à r.l., and Lansdowne Partners Austria GmbH have indicated support and intended favourable votes. These voting intentions accompany the separate requirement for shareholder approval.
The combination also crosses different corporate and listing frameworks. Bermuda’s Registrar of Companies would make the merger effective by issuing a certificate, with Gulf Keystone surviving. The transaction constitutes a reverse takeover under UK Listing Rules, and Gulf Keystone expects cancellation of its existing UK Financial Conduct Authority transition-category admission. It intends to move to Euronext Oslo Børs’ main market and discontinue its London Stock Exchange listing. Swedish Takeover Rules apply; the UK Takeover Code does not.
The merger information document is expected on or around 1 December 2026, with shareholder meetings on or about 22 December 2026 and completion expected in mid-2027. The companies would continue operating and financing themselves independently until completion, which remains subject to shareholder and governmental approvals and the other contractual conditions.
