A merger between Edinburgh oil and gas explorer Capricorn Energy and Israel-based NewMed Energy Management is now thought unlikely to go ahead after most of the Scottish company's board resigned.
Daily Business reports that seven of Capricorn's directors quit following pressure from rebel shareholders over its proposed tie-up with NewMed, a subsidiary of Delek Group.
NewMed said that it now believes "the probability for the closing of the transaction has significantly decreased".
Chief executive Simon Thomson and chairwoman Nicoletta Giadrossi, together with Peter Kallos, Alison Wood and Luis Araujo will step down with immediate effect. Two other directors, Keith Lough and James Smith, will also leave.
A general meeting called by shareholder Palliser Capital for next week to replace the seven directors with six nominees will go ahead as planned.
However, a meeting to consider the proposed merger with NewMed has been adjourned until February 22 to allow a reconstituted board to assess the proposal.
Oversight
Mr Lough remains on the board to ensure ongoing oversight of reporting obligations and other corporate governance requirements with the intention of stepping down from the board in advance of the general meeting on February 1. Mr Smith, chief financial officer, will also step down before the meeting.
The company said it has been in discussions with the nominee directors to appoint them to the board immediately.
However, their preference is to wait until the general meeting.
The continuing directors, including Cathy Krajicek and Erik B. Daugbjerg, will engage with the nominee directors to ensure an orderly transition and appropriate continuity of governance.
Capricorn, which was launched as Cairn Energy by former Scotland rugby international Bill Gammell, was last year forced to drop a proposed a combination with Tullow Oil following shareholder opposition.
It has assets in the UK North Sea, Mexico, Suriname, Mauritania and Egypt.
Delek is the controlling shareholder of Aberdeen's Ithaca Energy - one of the largest players in the UK North Sea.
Ithaca floated on the London Stock Exchange in November with a market capitalisation of around £2.5billion.
FTSE 100
The UK's top share index, the FTSE 100, was ahead 10 points at 7,767 shortly after opening this morning, following yesterday's 27-point loss.
Brent crude futures were 0.24% higher at $86.34 a barrel.
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