BOSSES at Tullow Oil yesterday reaffirmed their commitment to a £1.5bn merger with Capricorn – though shareholders in the latter continue to sound the alarm on the possible deal.
Tullow announced the deal in June, with CEO Rahul Dhir yesterday saying that the merger has “the potential for material value creation” alongside half year profits of $264m (£228m).
But yesterday Capricorn shareholders Schroders and Palliser both warned the board, who have already flagged they are open to alternative offers to Tullow’s, on the terms of the current deal.
Palliser Capital, which holds interests in more than 5 per cent of Capricorn, said the deal was a “poorly disguised nil-premium takeover” by Tullow that “materially undervalues” the firm.
Schroders, another major shareholder, said they would vote against the oil and gas producer’s merger earlier this week.
Madison Avenue and Legan & General IM – also major shareholders – have also made clear their opposition to the deal.