Israel's NewMed Energy LP said on Sunday it was making final arrangements for a merger with UK-based Capricorn Energy, whose shareholders will vote on whether to approve the deal on Feb. 1.
Capricorn's shareholder ballot is due the same day as a vote triggered by activist shareholder Palliser wanting to oust Capricorn's leadership. Palliser, Capricorn's third-biggest shareholder, has spoken out against the deal.
"NewMed Energy is continuing work to advance the merger and to obtain all needed approvals in Israel and England," NewMed said, adding that the goal was to get its own shareholders to approve the deal, without any changes, this quarter. At the same time, it said, the company continues "to examine strategic options" for increasing the value of its units.
The Capricorn-NewMed deal would create an Israel-Egypt-focused gas producer, including NewMed's stake in Israel's giant Leviathan offshore field at a time when Europe is looking for new energy supplies to replace supplies from Russia.
"It's clear to us that the global energy market is waiting for the expansion of Leviathan, and we are continuously advancing moves that will help us expand production and liquefy quantities of gas to be added to the system," said NewMed CEO Yossi Abu.
The proposed deal values Capricorn at $338 million in addition to a $620 million special dividend. That compares with its market capitalization of around $940 million on Friday.
When the planned all-share deal was announced in September, NewMed offered 271 UK pence per ordinary share to Capricorn shareholders. The vote on the merger is planned for 0900 GMT on Feb. 1, while a vote on Palliser's proposition to rejig Capricorn's board is scheduled for 1400 GMT on the same day, Capricorn said.
(Reuters - Reporting by Ari Rabinovitch/Editing by Steven Scheer and Susan Fenton)