(Bloomberg) -- Tullow Oil Plc’s failed deal with Capricorn Energy Plc was dragged down by hedge funds taking short positions and “emotional investors” who didn’t properly assess its value, according to its chief executive officer.

After focusing on controlling costs and lowering risk during his first two years leading the Africa-focused company, Tullow CEO Rahul Dhir in June unveiled a tie-up with Capricorn. Those plans were scuppered last week after Capricorn ditched Tullow and announced another deal with NewMed Energy LP. 

Capricorn was “aggressive” in pitching the deal in the spring “and we kind of said ‘ok let’s look at it’ and we saw value,” Dhir said in an interview in Cape Town on Tuesday. After the merger was announced, opposition from Capricorn shareholders grew and became more public.  

“You had hedge funds who drove the narrative without any real financial exposure,” the CEO said, adding that some had short positions on Tullow and long positions on Capricorn.

Tullow had agreed to buy Capricorn in an all-stock deal that valued the combined company at roughly £1.5 billion ($1.7 billion). The companies said at the time the transaction would open up opportunities to expand across Africa. 

“There were investors who had a very strong negative view on Tullow,” the CEO said, citing one shareholder who criticized the deal as a cultural misfit, despite Dhir previously working at Capricorn in its earlier iteration as Cairn Energy. “I was really struck by the emotion and it was emotion based on history, not on fact.” 

Tullow’s business plan remains unchanged and includes finding a strategic partner for its $3.4 billion project in Kenya by the end of the year. The company is mainly concentrating on legacy assets in Ghana, drilling cost-effective wells in an effort to bolster production.

“The great thing for us in the organization has been that people stay focused on the core business,” Dhir said, while maintaining that the deal with Capricorn was still a fair one. “It’s always disappointing when you worked on something that doesn’t happen.”

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