Capricorn Energy has scrapped the Scottish-headquartered firm's contentious merger with Israeli gas group NewMed following months of shareholder pressure that forced the departure of the majority of Capricorn's board of directors.
The shareholder revolt led by Palliser Capital led to the exit last month of seven Capricorn directors including chief executive Simon Thomson. They were replaced on February 1 by six fresh appointees who undertook a review of the proposed transaction as an "immediate priority".
"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," Capricorn said in a statement issued this morning.
READ MORE: NewMed merger 'significantly' less likely as Capricorn caves in
"This action is necessary to enable the consideration of all potential strategic options for the company, including the material return of capital to shareholders and potential engagement with respect to alternative options."
In response, NewMed said it has dropped the plan and that both sides had agreed to terminate it.
The deal was announced in September of last year, replacing a proposed transaction with Tullow Oil. Shareholders had also come out against the Tullow merger.
READ MORE: Palliser turns up the heat on Capricorn Energy
Formerly known as Cairn Energy, Edinburgh-based Capricorn is due to issue its year-end results on April 27. A trading update ahead of those results will be issued "shortly".
The vote on February 1 saw Chris Cox, Maria Gordon, Richard Herbert, Hesham Mekawi, Tom Pitts and Craig van der Laan join Capricorn's board of directors. Two previous directors remain in place, Catherine Krajicek and Erik Daugbjerg.
Shares in Capricorn Energy were down marginally at 248.2p as of mid-day.
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