Capricorn-NewMed cancel proposed merger

Capricorn Energy plc announced that its proposed merger with Israeli company NewMed Energy Ltd had been terminated by mutual consent.

STRATEGIC REVIEW

Cancellation of the plans comes less than four months after Capricorn’s previous proposals to merge with Tullow Oil also failed.

Today’s news follows a strategic review of the NewMed merger plans by Capricorn’s new board of directors as well as its potential future business.

The company’s previous board had scheduled a general meeting for 1 February for shareholders to vote on the merger, but this was adjourned until 22 February 2023 to allow the review.

POTENTIAL OPTIONS

Capricorn said it was mindful of its “overwhelming mandate” from shareholders and the views of proxy advisory agencies and a “significant number of shareholders” had expressed in relation to the NewMed deal, including “their unwillingness to support it on its current terms”.

“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.

“The board believes 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.”

Capricorn added that the scheduled resolutions for the merger would be of no effect for the adjourned general meeting which will open and immediately close without shareholders voting.

The company plans to issue to its year end results on 27 April 2023 after a trading report which is expected shortly.