Capricorn Energy has given up on its planned merger with Israeli group NewMed Energy, following months of shareholder pressure.
Activist investor Palliser and some of Capricorn's biggest shareholders publicly opposed the tie up, while major shareholder advisory groups also recommended rejecting the plan.
Earlier this month, almost the entirety of Capricorn's board - including its chief executive - were replaced by new directors proposed by Palliser, who then announced a strategic review.
"Taking into consideration the views expressed by shareholders... the board has resolved to advise shareholders to vote against the NewMed transaction," read a statement from Capricorn.
"This action is necessary to enable the consideration of all potential strategic options for the company, including the material return of capital to shareholders and potential engagement with respect to alternative options."
NewMed confirmed that the two companies had "mutually agreed" to terminate the transaction.
A vote by Capricorn shareholders on the deal planned for 22 February will now not take place.
Under the NewMed deal, the Edinburgh-based energy company would have paid out a $620m special dividend - sourced mainly from an Indian tax payout - to its shareholders, which the previous leadership said would be cut to around $500m without the merger.
The deal is the second transaction Capricorn has scrapped since September, when it ditched a merger plan with Tullow Oil - also met by strong investor opposition - to pursue the transaction with NewMed.
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