Capricorn Energy and NewMed Energy have dropped plans to merge. The plan became untenable following major changes at Capricorn’s board.
On February 1, a vote saw six new board members appointed to Capricorn. The original plan had been to hold a vote on the proposed merger with NewMed on the same day but this was pushed back, to February 22.
Capricorn said that, given views from various proxy advisors and shareholders, its board was unwilling to support the NewMed deal in its current terms. As such, the company asked shareholders to vote against the plan.
NewMed, in response, said it was dropping the plan and that both sides had agreed to terminate it.
The plan was launched on September 29, 2022, replacing a proposed transaction with Tullow Oil. Shareholders had also come out against the Tullow merger.
Capricorn’s board said it was considering all strategic options. This would include a “material return of capital” to shareholders. It is also considering alternative plans.
The Edinburgh-based company will issue its end of year results on April 27. It will also provide a trading update shortly, it said.
The vote on February 1 saw Chris Cox, Maria Gordon, Richard Herbert, Hesham Mekawi, Tom Pitts and Craig van der Laan join the board. Two previous directors remain in place, Catherine Krajicek and Erik Daugbjerg.
Van der Laan was appointed chair, Cox as interim CEO and Herbert as senior independent director. Cox was most recently the CEO of Spirit Energy.
Palliser Capital drove opposition to Capricorn’s NewMed deal. The investor made a number of accusations during its campaign, including an allegation that “costly strategic pivots and capital allocation blunders” has wasted $3 billion since 2011.
Palliser has suggested that Capricorn should return at least $535 million to shareholders.