Capricorn Activist Palliser Positioned to Call Shareholder Vote




  • In Business
  • 2022-11-29 00:21:17Z
  • By Bloomberg
 

(Bloomberg) -- An activist investor seeking to halt Capricorn Energy Plc's takeover by NewMed Energy LP has converted its holdings to common shares, according to people familiar with the matter.

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The move clears the way for Palliser Capital UK Ltd. to potentially call a special meeting for a vote against the deal.

London-based Palliser, which is run by former Elliott Investment Management executive James Smith, now owns 6.9% of Capricorn's common stock after converting its position Monday, said the people, asking not to be identified because the matter is private.

No decision has yet been made on whether to proceed with calling a meeting, the people said.

The stake was previously held in derivatives, which don't grant investors the right to request a meeting, according to a regulatory filing. In the UK, a shareholder must own at least 5% of voting stock to call a meeting.

A representative for Palliser declined to comment. Representatives for Capricorn and NewMed weren't immediately available for comment.

Shares in Capricorn fell 0.2% to 245.40 pence in London Monday, giving the company a market value of 773 million pounds ($926 million).

Capricorn abandoned a highly criticized tie-up with Africa-focused Tullow Oil Plc in September to pursue the merger with NewMed, a gas producer in the eastern Mediterranean. The deal between Capricorn and NewMed would create one of the largest, independent upstream energy producers listed in London, the companies said in a statement at the time.

The tie-up with NewMed has also come up against stiff opposition from Capricorn investors owning more than a third of shares, who argue its terms undervalue the company. They include some of Capricorn's largest holders, Madison Avenue Partners and Newtyn Management, as well as Kite Lake Capital Management and Legal & General Investment Management.

Palliser has called on Capricorn to abandon the deal and pursue its own value-creation plan on a stand-alone basis. Another activist, Irenic Capital Management, asked Capricorn to shelve its plans and pursue a liquidation.

(Updates with share price in seventh paragraph.)

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