Capricorn Energy PLC (LSE:CNE, OTC:CRNZF) has thrown an olive branch to activist shareholder, Palliser Capital, suggesting that with agreement the board could be reconstituted to reassess the NewMed deal with a recommendation then being made to shareholders.
Palliser has been agitating for change at Capricorn, arguing that the NewMed merger should be scrapped and seven directors removed, replaced with six of its own nominees.
But Capricorn said the Palliser nominees would probably terminate the deal with NewMed and implement the Palliser plan, “which is likely to destroy value”.
“It is entirely appropriate that our shareholders should be given the opportunity to vote on this matter with the benefit of the prospectus on the proposed NewMed combination available to them,” a letter to Palliser from the Capricorn board said.
“They will be given a clear choice of either the NewMed combination with its proposed new board, or alternatively the appointment of Palliser’s board nominees to pursue an alternative plan,” it continued.
But the company also suggested “a different route” where the board was reconstituted “through agreement with you and your nominees so that a changed board can reassess the NewMed combination," and make a recommendation to shareholders.
Capricorn also invited the Palliser board nominees “to carry out due diligence on the strategic options the company has reviewed and the proposed NewMed combination, prior to their proposed appointment”.
“The board’s intention continues to be to resolve this situation in an orderly fashion that ensures that our shareholders can make their own fully informed decisions. We continue to invite you to engage in a constructive dialogue to ensure that this can be delivered for the benefit of all shareholders," the Capricorn letter concluded.
Yesterday, Reuters said Legal & General planned to join Palliser in voting to oust the senior leadership and halt its planned merger with NewMed, citing a company document.
Capricorn shareholders will vote on the NewMed deal on the morning of 1 February before voting in the afternoon on activist investor Palliser's proposal to overhaul the board.
The deal is opposed by Capricorn's three biggest investors, who say that it undervalues Capricorn.