STARSALIGN FORACTIVISTS ATCAPRICORN

NICHOLAS EARL AND STAFF

ACTIVIST pressure sensationally forced Capricorn Energy’s chief executive out of a job yesterday, leaving the firm’s plans for a merger with Israeli rival Newmed seemingly in tatters.

London-listed Capricorn had been hoping to tie up a deal with Newmed that would have totalled near on £800m once a special dividend was included.

But activists –most notably major shareholder Palliser –appear to have nixed the deal, with boss Simon Thomson and chair Nicoletta Giadrossi stepping down yesterday alongside three other non-exec members of the board.

Capricorn had moved for Newmed after cooling on an initial merger plan with Tullow Oil in the autumn of last year.

Palliser issued a letter earlier this month calling for the deal to be reconsidered, saying the Capricorn board was showing “brazen disregard” and said the firm had lost the “trust and confidence” of some 40 per cent of shareholders.

That itself came after LGIM, which owns four per cent of Capricorn’s shares compared to Palliser’s more than seven per cent, also said it wouldn’t back the merger and would vote to oust the management team.

Shareholder advisory outfits ISS and Glass Lewis also threw their weight behind the hedge fund’s criticisms, and a late notice offer to Palliser to add representatives to the Capricorn board appeared only to pique the fund more.

Capricorn for their part said that Palliser’s complaints relied on “outdated and incorrect facts and assumptions” and that their alternate plan to grow the business “underestimates the value creation potential of the Newmed combination”.

The deal priced Newmed at £277m and would have come alongside a more than £500m special dividend.

The vote on the deal, which had been due alongside a vote on the board’s make-up on 1 February, has been pushed back until the end of next month.

Palliser welcomed yesterday’s dramatic developments.

A spokesperson said: “We are confident that today’s announcement marks the first step towards governance reform and a new leadership team focused on optimising value and delivering real growth in Egypt.”

Newmed, with significant operations in the Eastern Med, acknowledged that the likelihood of a deal had “significantly decreased”.

NOW THAT’S A HAPPY BURNS Scotch whisky firm in good spirits

THE COMPANY behind connoisseurs’ favourite The Scotch Malt Whisky Society hailed “demonstrable momentum” yesterday as it reported a year of strong growth.

The Artisanal Spirits Company reported revenues up some 20 per cent on the year before, with membership of its Scotch Malt Whisky Society –complete with access to exclusive bars including one in Hatton Garden –up around 12 per cent. The firm also announced that David Ridley, the six-year boss, was stepping down with finance director Andrew Dane stepping in to lead the business. Shares popped just shy of nine per cent on the news –something sure to be toasted with a dram at the firm’s Edinburgh headquarters as attention north of the border turns to Burns Night.