(Alliance News) - NewMed Energy Management Ltd on Tuesday said that its business combination with Capricorn Energy PLC was unlikely to go ahead on the basis of resignations from most of the latter's board members.
NewMed Energy is a subsidiary of the Delek Group, focused on the exploration, development, production and sale of natural gas and condensate in the Eastern Mediterranean.
Capricorn is an Edinburgh-based upstream energy company with assets in the UK North Sea, Mexico, Suriname, Mauritania and Egypt.
On Tuesday, Capricorn released a report to investors in which it clarified that it had decided to adjourn its shareholders meeting to approve the transaction.
It also noted that the shareholders meeting was called at the request of Palliser Capital Ltd for the replacement of serving directors, and that five of nine Capricorn board members - including the chief executive officer and chair of the board - had resigned, or were due to resign from the board.
The resignations followed a proposal by Capricorn in September 2022 to merge with NewMed Energy LP, after withdrawing from a planned merger with Tullow Oil PLC in June.
Capricorn said on Tuesday that the purpose for deferral of the meeting is to allow the new composition of the board of directors to examine the transaction alongside other strategic alternatives.
NewMed said that, in light of these developments, it estimates that "the probability for the closing of the transaction has significantly decreased".
Capricorn shares were flat at 244.00 pence each in London on Tuesday afternoon.
By Holly Beveridge; Alliance News reporter
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Capricorn Energy PLC (CNE)