The broker said that at a circa 27% discount to its 489p/share tangible NAV, it has "some sympathy" with the view that Genel’s offer falls short of a full valuation for the Capricorn business.
"However, it does come from an established regional oil producer with a clear plan for funding the circa $360m acquisition and is described by Capricorn as ‘a meaningfully superior proposal relative to other credible proposals received’," it said.
Shore said the gap between its tangible NAV and the offer price leaves room for a competing bid to emerge.
"However, Capricorn management appears to have run a lengthy process exploring various proposals to reach this point," it said. "We therefore move our rating to hold from buy on the expectation that no higher offer emerges."
Shore said its target price of 357p is set in line with the offer price.