Legal & General to vote against NewMed’s takeover bid for Capricorn Energy

A fight over the future of Capricorn Energy is set to come to a head this week on the announcement that one of its top investors is set to vote against the oil and gas firm’s board in a push to veto NewMed Energy’s £3bn takeover deal.

Legal & General Investment Management (LGIM) is set to vote against Israeli oil and gas producer NewMed Energy’s plans to take over London-listed Capricorn Energy, The Sunday Times reported.

The asset manager’s veto is set to heighten tensions in a row over Capricorn’s future, amid calls from activist investors for an overhaul of the British oil and gas explorer’s board.

LGIM is set to announce it will vote against the £3bn deal at a shareholder meeting on 1st February, after the firm said on Friday it will push ahead with the ballot at the start of next month.

LGIM also plans to back activist investor Palliser in a separate vote on the same day to eject seven members of Capricorn’s nine-strong board.

NewMed’s plans to snap up Capricorn are aimed at creating a more dominant Israel and Egypt focused gas producer, in a bid to capitalise on higher demand for alternative sources of natural gas following Russia’s invasion of Ukraine.  

Capricorn has previously said the deal with accelerate its plans to return $620m (£506m) to shareholders.

However, Palliser has argued NewMed’s plans to takeover Capricorn undervalue the British oil and gas explorer.

In backing Palliser’s opposition to the deal, L&G will join a chorus of investors seeking to block NewMed’s takeover plans. Capricorn needs only a simple majority to get the deal through.

LGIM, Capricorn Energy, and NewMed Energy were approached by City A.M. for comment.