Edinburgh-based Capricorn Energy has arranged a general meeting of the company for February 1 that was requested by its third-biggest shareholder Palliser Capital to vote on removing seven Capricorn directors including CEO Simon Thomson.

Palliser is one of a number of Capricorn investors opposed to a planned merger of the Scottish oil and gas firm with Israel’s NewMed Energy, arguing that it undervalues Capricorn, which was formerly known as Cairn Energy.

Capricorn has rejected Palliser Capital’s proposal to scrap the proposed merger with NewMed.

In a stock exchange statement, Capricorn said: “A notice of general meeting  is being posted to shareholders today.

“The notice convenes a general meeting of the company requested by Palliser Capital Master Fund Ltd to consider resolutions to remove seven of the current directors from the board of directors of the company and to appoint six new directors, selected by Palliser, to the board.

“Taking account of the date on which Palliser’s requisition notice was deposited at the company’s registered office as required by the company’s articles of association, the general meeting will be held at the Sheraton Grand Hotel, 1 Festival Square, Edinburgh EH3 9SR at 2.00 p.m. (London time) on 1 February 2023.”

Palliser Capital, together with other shareholders Madison Avenue Partners, Kite Lake Capital, Newtyn Management, Irenic Capital, and VR Capital, whose combined interests represent over 32% of Capricorn Energy, on Monday published a letter sent to the Capricorn board “in response to its decision to hold a general meeting of the company’s shareholders on the proposed combination with NewMed Energy LP on or around the same date as the general meeting requisitioned by Palliser on 19 December 2022 …”

In a statement, the shareholders said: “Capricorn’s decision to coincide the timing of the two general meetings, the letter contends, effectively conflates two distinct matters: shareholder consideration of the NewMed transaction and shareholder consideration of proposed board changes.

“The letter highlights the shareholders’ concerns that the board’s decision seems self-serving; it aims to protect many of the existing directors against removal, unnecessarily limits shareholder optionality, and is contrary to shareholders’ best interests.

“Further, holding the general meetings so close together deprives any reconstituted Capricorn board of the opportunity to re-assess the merits and terms of the NewMed transaction in parallel with a consideration of a range of other options.

“The letter calls on the board to confirm that – (i) Board Change GM will occur no later than 30 January and (ii) NewMed GM will occur at least 4 weeks thereafter to ensure that any new directors can thoroughly, thoughtfully and transparently assess all options, including a potential combination with NewMed.”

Capricorn Energy responded with its own letter.