Capricorn Energy abandons NewMed deal after shareholder opposition

Capricorn Energy said on Wednesday that it has abandoned a planned takeover by Israeli gas producer NewMed Energy following opposition from shareholders.

"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," it said.

As a result, the two companies have mutually agreed that the merger entered into last September will 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 said.

Palliser Capital, one of Capricorn's largest shareholders, voiced its opposition to the deal in October, saying the merger with NewMed was "another one-sided deal that does not reflect the company’s intrinsic value" and urging the company "to recognise that it need not be a forced seller".