Capricorn Energy and NewMed Energy have called off their proposed merger after the Edinburgh-based company’s new board recommended that shareholders vote against it.

The merger with Israel-based NewMed was promoted by the former board but a major shareholder succeeded in having seven directors ejected and replaced by six others.

In a statement today, the new board said that following a strategic review the company and NewMed have mutually agreed that the proposed merger agreed on 29 September 2022 should be terminated with immediate effect.

As a result, the company called off the shareholder vote scheduled for the general meeting on Wednesday next week.

Capricorn Energy shares were 0.4% lower at 248 pence. However, the stock is up 18% over the past year.

Capricorn, formerly Cairn Energy, has assets in the UK North Sea, Mexico, Suriname, Mauritania and Egypt.

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.

In January, Capricorn had called another shareholder meeting at the request of Palliser Capital Ltd, which demanded the replacement of a slew of directors. As a result, five of nine Capricorn board members – including the chief executive officer and chair of the board – resigned.

Capricorn had proposed the merger with NewMed Energy back in September of last year, having withdrawn from a merger with Tullow Oil that had been announced in June.