Capricorn Energy has scrapped its merger with rival Tullow Oil in favour of a mixture with Israeli pure fuel group NewMed Energy.
The announcement comes weeks after Tullow stated it remained “fully committed” to the $1.4bn merger regardless of Capricorn, previously generally known as Cairn Energy, saying it was in search of options following shareholder opposition to the deal.
London-listed Capricorn and NewMed, which holds a forty five.3 per cent working curiosity within the Leviathan subject within the Mediterranean, on Thursday introduced a “binding business combination agreement” to “create a MENA gas and energy champion and one of the largest upstream energy independents listed in London”.
Under the deal, NewMed unit holders will obtain 2.337344 new Capricorn shares for every of their present items. Capricorn shareholders will maintain about 10.3 per cent of the mixed entity, with NewMed unit holders, together with the partnership’s present basic accomplice, holding the remainder.
Capricorn shareholders may even obtain a money particular dividend, anticipated to be $620mn, previous to the mixture, each firms stated.
The board of administrators of Capricorn stated it believed the merger with NewMed was “is in the best interests of Capricorn shareholders and intends to recommend unanimously that Capricorn shareholders vote in favour” of the deal.
Simon Thomson, chief government of Capricorn, stated the transaction “delivers our shareholders a substantial capital return, together with an ongoing stake in a differentiated UK-listed company, shaped for the future of the energy industry”.
The firms stated they anticipated to retain Capricorn’s itemizing on the London Stock Exchange however commerce below NewMed Energy. They added that additionally they meant to checklist on the Tel Aviv Stock Exchange.