UK-based natural gas company Serica Energy has rejected a revised merger proposal from Kistos, an energy investment firm, which values the company at around $1.4bn.

Earlier this month, Kistos made a cash-and-stock offer of 382p per share, valuing Serica at $1.2bn, which the company has rejected.

The investment firm has revised its offer price to 425p per share, increasing it by 11% compared to the previous offer.

Under the revised proposal, Serica shareholders would receive 0.4 new Kistos shares, along with 213p in cash for each Serica share held.

The new offer represents a 19% premium to Serica’s last closing price of 357p.

In addition, the revised offer also proposes Kistos CEO Andrew Austin be appointed as chief executive, and Serica chair Tony Craven Walker continue as chairman for the combined company.

Serica said that its board of directors, together with its financial advisors, has unanimously rejected the revised offer from Kistos, after careful consideration.

The company said that Kistos’ new offer significantly undervalues its worth, and does not reflect the basic value of its core producing oil and gas assets.

The revised offer does not consider its plans and capability for organic investment in its existing fields to increase production, reserves and asset life, said Serica.

In addition, Kistos’ revised offer proposes using Serica’s own cash to partly fund the transaction, which includes a 67p capital distribution from Serica’s own cash resources.

Established in 2020, resulting from the sale of its predecessor RockRose Energy for £250m, Kistos targets attractive opportunities within the European transition energy market.