Capricorn investor Palliser Capital said on Thursday it opposed Capricorn's planned merger with Israel's NewMed Energy, echoing its criticism of a previous failed merger plan with Tullow, as undervaluing the company.
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 non-Russian energy supplies. It includes a $620 million special dividend to Capricorn shareholders.
Palliser, which holds investments in about 6.6% of Capricorn, follows hedge fund Irenic Capital Management in asking Capricorn to ditch the deal. Hedge funds often hold share derivatives, which can be turned into direct shareholdings.
Capricorn last month replaced its merger plans with West Africa-focused Tullow Oil, the terms of which had met with investor opposition, with the NewMed proposition.
Palliser said in a statement Capricorn could be valued at 315 pence per share, "a 29% upside to the company’s closing share price on 25th October 2022 and a 27% upside to the implied value of the NewMed transaction."
Capricorn did not immediately respond to a request for comment.
(Reporting by Shadia Nasralla; editing by John Stonestreet, Robert Birsel)