How Palliser Reshaped Capricorn: From Cash Discount and Boardroom Battle to a Takeover Premium
Genel Energy has announced a recommended cash offer for Capricorn Energy, valuing the company at approximately $360 million on a fully diluted basis. Shareholders have been offered $4.74 per share, comprising $3.75 in cash from Genel and a $0.99 special dividend from Capricorn. The total package is worth 357p per share, a 34% premium to Capricorn’s closing share price on 10 March 2026, the day before the start of the offer period.
If the Genel offer completes, it will mark the final act in Palliser Capital’s involvement with Capricorn. The London-based activist investment firm first built a position in Capricorn after it had recovered more than $1 billion from the Indian government in a tax dispute and was facing a fundamental question over what to do with the money. Palliser would go on to become one of Capricorn’s largest shareholders and lead a successful campaign against the company’s strategy and board.
The Capricorn board at the time sought to split the opportunity between shareholders and the future of the company, proposing a $500 million special dividend, together with a share-buyback programme of up to $200 million, while retaining substantial financial capacity to expand and diversify the company through further investment and acquisitions.
For Palliser, the attraction was the combination of a large cash position and the discount at which Capricorn was trading. The risk was what might happen to that cash. By the summer of 2022, the company’s market value was around $835 million, while its balance sheet held $809 million of gross and $631 million of net cash. The market was therefore attributing relatively little value to Capricorn’s Egyptian producing business and contingent receivables, reflecting concern over how the cash might ultimately be used.
For Palliser to capture that value, it would first have to overcome the appetite of the Capricorn board, as then constituted, for further acquisitions. A conflict was brewing and it was not long before it came to the fore. As the board began pursuing major transactions, the disagreement developed into an increasingly public confrontation over whether the value already accumulated inside Capricorn would be realised for existing shareholders or redeployed through corporate expansion.
