Capricorn Energy Plc ditched several of its directors after shareholder Palliser Capital ran a campaign to shake up its board and block a proposed merger with NewMed Energy LP.
(Bloomberg) — Capricorn Energy Plc ditched several of its directors after shareholder Palliser Capital ran a campaign to shake up its board and block a proposed merger with NewMed Energy LP.
The oil firm’s chair and chief executive officer will step down from the board immediately, and its finance chief will do so at a later date, Capricorn said Tuesday after Palliser and other investors panned the deal. They’d also criticized Capricorn for scheduling a shareholder vote on the tie-up at about the same time as a meeting called for by Palliser to rejig the board.
Caving to pressure, Capricorn said that while a general meeting will go ahead as planned on Feb. 1, a meeting on NewMed will be pushed to Feb. 22, “allowing a reconstituted board to assess the proposed NewMed combination alongside other strategic options.”
Chair Nicoletta Giadrossi will step down with immediate effect, and CEO Simon Thomson will also quit as a board director, Capricorn said in a statement. James Smith remains on the board as chief financial officer, but will leave before the requisitioned general meeting.
Palliser’s campaign has gained steam over the past week as several prominent shareholder advisory firms backed the activist investor, recommending that holders vote against the merger and vote for Palliser’s proposed board-change resolutions. It’s seeking to appoint six independent director candidates.
London-based Palliser, one of Capricorn’s biggest shareholders, has said the NewMed deal undervalues the oil company’s assets and there’s significant additional value that could be realized. Capricorn contends the deal would provide at least $120 million more of a short-term return than on a standalone basis.
The company turned to the merger after dropping a highly criticized tie-up with Tullow Oil Plc in September last year.
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