Demoralizadoed Fleeing Units

[NBGB]

Tread and I had a situation where I had demoralized units fleeing an assault hex and they had to flee to a hex only occupied by a demoralized leader he had.  We played it that they both occupied the same hex.  At a later point if my units could have recovered and his leader was still there, then I could attempt to capture.  Was this correct?  Thank you.