Irenic Capital Management, which owns a 1.9% stake in Capricorn Energy, has accused the Edinburgh company’s board of flawed analysis with regard to its proposed merger with Tel Aviv business NewMed.

Capricorn, formerly Cairn Energy, accused rebel shareholder Palliser Capital Master Fund of proposing an alternative to its NewMed plan that would destroy value.

But New York based Irenic said Capricorn’s case for the tie-up is strewn with errors and is “simply unpersuasive”.

Irenic today reiterated its support for Palliser’s call to replace seven Capricorn directors with six nominees. Capricorn has agreed to a general meeting to consider its proposals which will be held on 1 February at the Sheraton Hotel, Edinburgh.

Adam Katz, co-founder and chief investment officer at Irenic, today commented: “Irenic believes Capricorn’s January 5 letter and presentation are error-ridden, misleading and simply unpersuasive.

“The proposed NewMed combination lacks compelling industrial and financial logic and appears to require contortions to justify. We remain opposed.

“In contrast, we view Palliser’s plan as a superior alternative that delivers substantially higher value to Capricorn shareholders.

“In our view, Capricorn’s flawed analysis of the NewMed merger’s potential value only reinforces the need for shareholders to support Palliser’s efforts to facilitate a reconstitution of Capricorn’s board.

“By catalysing prompt and meaningful boardroom change, we believe shareholders can ensure that a comprehensive and impartial review of all strategic options is conducted. Palliser has Irenic’s full support for its Requisition Proposal at the upcoming general meeting of shareholders.”