Capricorn Energy has been urged to ditch its latest merger deal with Israel’s NewMed Energy.
Pallister Capital, which owns about 6.6 per cent of Edinburgh-based Capricorn, said the agreement undervalues the Scottish company. A previous “merger of equals” with Tullow Oil was similarly criticised.
Capricorn agreed the deal with NewMed at the end of last month, scrapping its proposed merger with Tullow in the process. Capricorn shareholders are to receive a $620 million special dividend which together with the exchange of shares values the company at 271p per share.
READ MORE: Capricorn ditches Tullow merger for Israeli gas specialist NewMed
In a statement Pallister said Capricorn, formerly known as Cairn Energy, could be valued at 315p per share. This would represent “a 27% upside to the implied value of the NewMed transaction”.
The combined group would be listed in London under the NewMed name, with Capricorn chief executive Simon Thomson making way for NewMed boss Yossi Abu. It would have a portfolio of 11.8 trillion cubic feet of gas with production focused in Israel and Egypt, including NewMed’s 45% stake in Israel's giant offshore Leviathan field.
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