An activist investor claiming to represent the views of more than 30 per cent of shareholders in Edinburgh-based Capricorn Energy has demanded an extraordinary meeting to replace the company’s chair and chief executive and halt its plans to merge with an Israeli natural gas producer.
Palliser Capital, which holds 7 per cent of the shares in Capricorn, formerly Cairn Energy, said the meeting was necessary given what it called a “loss of confidence in the judgment and priorities of the current board” and what it described as a “sustained inability to execute a value-accretive corporate strategy”.
Capricorn, an oil and gas producer, announced in September plans to merge with NewMed Energy, an Israeli gas producer. It also abandoned plans for a merger with Tullow Oil, which had proved unpopular with many shareholders. Palliser opposes the NewMed deal and instead proposes distributing much of Capricorn’s £700mn in net cash to shareholders, among other steps.
The activist investor has said its plan offers a “clear path” to unlocking 400p per share in value for Capricorn shareholders in the medium term. The company’s shares were trading at 253p per share in London on Monday morning.
Palliser said shareholders representing another 28 per cent of the share capital had submitted letters of intent telling Capricorn that they opposed the planned deal with NewMed.
Under the Palliser proposals, seven members of the existing board — including chief executive Simon Thomson and chair Nicoletta Giadrossi — would be removed. They would be replaced by six oil and gas industry veterans backed by Palliser.
There was no immediate response from Capricorn on Palliser’s demand.
