LONDON, June 13 (Reuters) - Legal & General Investment Management has "strong reservations" about a proposed merger between Capricorn Energy and Tullow Oil, the shareholder in both companies said on Monday.
"In our capacity as a responsible investor, we have strong reservations about the proposed transaction," LGIM, the investment arm of UK insurer Legal & General, said in a statement.
"It is our opinion that there is no clear strategic rationale for the combination."
Tullow and Capricorn agreed an all-share merger earlier this month in a deal worth around $827 million paid in newly-issued Tullow shares.
The deal, which still needs shareholder approval from both groups, would allow indebted Tullow to end a payout drought for its shareholders with the aid of Capricorn's cash.
LGIM has a 3.91% stake in Capricorn and 1.74% stake in Tullow. (Reporting by Carolyn Cohn; editing by Shadia Nasralla)