nxs weighing options

ARC, Anzon tie-up a poser for Nexus stake

Nigel Wilson, Energy writer | December 18, 2007

NEXUS Energy is weighing options for its 19.4 per cent stake in Anzon Australia, which is about to merge with ARC Energy.

Managing director Ian Tchacos said yesterday Nexus was awaiting the scheme booklet for the proposed $1.1 billion merger of Anzon with ARC.

The independent expert's report by Deloitte Corporate Finance, which concluded the merger proposal was fair and reasonable, would help determine Nexus's next step, he said.

Last year, Anzon made an acrimonious and ultimately unsuccessful $171 million all-scrip bid for Nexus, which left it with a 12.4 per cent stake.

In retaliation, Nexus has built up a stake of nearly 20 per cent in Anzon, which earlier in the year resisted a merger with its rival, preferring instead to put itself up for sale by tender, a process that ARC won.

The ARC proposal involves an all-share deal of 1.175 ARC shares for each Anzon share which, when launched, valued Anzon Australia at around $708 million and its London-listed parent and 53 per cent shareholder, Anzon Energy, at around pound stg. 178 million ($424 million).

Directors of both Anzon companies have said they support the schemes of arrangement with ARC Energy and will vote in favour in the absence of a superior offer.

Mr Tchacos said there appeared to be four options available to Nexus.

These were for Anzon and Nexus to come to a mutual agreement on their cross-shareholdings, for Anzon to agree to some sort of merger involvement with Nexus, for Nexus to make an on-market bid for Anzon or for Nexus to use its Anzon stake to block the merger with ARC when shareholders vote on the scheme of arrangement on January 29.

"The independent expert's report will be a guide for where we might go," he said, pointing out that Nexus believed it could finance a bid independent of its funding for the Crux and Longtom projects.

Crux in the Timor Sea and Longtom in Bass Strait hold reserves five times those of Anzon, the sole holding of which is 40 per cent of the Basker/Manta/Gummy project in Bass Strait.

Mr Tchacos hinted that Nexus might be considering a cash component to top the ARC proposal.