Capricorn Energy PLC and NewMed Energy Ltd on Wednesday called off their proposed merger, after the Capricorn board recommended that shareholders vote against the idea at a general meeting scheduled for next week.
Capricorn Energy shares were 0.4% lower at 248.00 pence each in London on Wednesday morning. However, the stock is up 18% over the past year.
Capricorn is an Edinburgh-based upstream energy company with assets in the UK North Sea, Mexico, Suriname, Mauritania and Egypt.
NewMed Energy is a subsidiary of the Delek Group, focused on the exploration, development, production and sale of natural gas and condensate in the Eastern Mediterranean.
Capricorn’s board previously had promoted the merger with NewMed, but a major shareholder succeeded in ousting numerous board members and installing new ones, who set out to review the plan.
‘Based on its work to date in respect of the strategic review and taking into consideration the views expressed by shareholders on the NewMed transaction, the board has resolved to advise shareholders to vote against the NewMed Transaction. As a consequence of this decision, the company and NewMed have mutually agreed that the business combination agreement entered into between the company and NewMed on 29 September 2022 be terminated with immediate effect,’ Capricorn said.
As a result, the company called off the shareholder vote scheduled for the general meeting on Wednesday next week.
For its part, NewMed on Wednesday confirmed the two sides have mutually agreed to terminate the transaction.
Back in January, Capricorn had called another shareholder meeting at the request of Palliser Capital Ltd, which demanded the replacement of a slew of directors. As a result, five of nine Capricorn board members - including the chief executive officer and chair of the board - resigned.
Capricorn had proposed the merger with NewMed Energy back in September of last year, having withdrawn from a merger with Tullow Oil PLC that had been announced in June.
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