Shareholder calls Capricorn ‘self-serving’

Palliser Capital Master Fund Ltd has urged Capricorn Energy plc to reconsider the timing of a general meeting (GM) to approve the proposed merger with NewMed Energy and Palliser’s requisitioned GM on Capricorn’s board changes.

DATES

Capricorn earmarked 1 February for the requisitioned GM, but the shareholder (32%) called for it to be held no later than 30 January 2023 and the NewMed GM to take place at least four weeks afterwards.

In an open letter dated 8 January, Palliser added that the timing of the two general meetings would “conflate two distinct matters: shareholder consideration of the NewMed transaction and shareholder consideration of the requisition proposal.”

The shareholder has urged Capricorn to reconsider the dates of both meetings.

“In the absence of any other plausible explanation, the board’s decision seems self-serving – aimed at protecting many of the existing directors against removal.

“Fundamentally, the sequencing of the general meetings unnecessarily limits shareholder optionality and is inconsistent with shareholders’ best interests, judged from our respective viewpoints as significant investors in the company’s shares.”

LOSS OF CONFIDENCE

Palliser wrote that there was a “groundswell of shareholder opinion on the appropriate pathway forward for the company.”

“Holders of more than 40% of Capricorn’s issued share capital have lost confidence and trust in the current board and have indicated, by signing letters of intent or otherwise, that they support the requisition proposal.”

NEWMED REVIEW

The shareholder said that the requisition proposal aimed to review, among other matters, all strategic options including the NewMed transaction.

A reconstituted board would be able to re-assess the proposal in parallel with a consideration of a “range of other options”.

Palliser pointed out that NewMed had requested an extension until 31 March 2023 for approvals from its unitholders and the longstop date for transaction was not until 30 June 2023.

The shareholder added that the proposed date of the board change general meeting of 1 February 2023, also extended beyond the six-week deadline imposed by Article 59 of the company’s articles of association.

SHAREHOLDERS

The letter was signed by Palliser Capital (UK) Ltd; Madison Avenue Partners LP; Kite Lake Capital Management (UK) LLP; Newtyn Management, LLC; VR Global Partners, LP; and Irenic Capital Management LP.