nexus ready to trump anzon arc merger

Nexus ready to trump Anzon-ARC merger

October 25, 2007

OIL producer Anzon Australia's plans to merge with ARC Energy are likely to be dashed by predator Nexus Energy, which has hinted at a rival takeover offer.

ARC and Anzon yesterday unveiled the details of a proposed merger after an extensive auction process by Anzon.

ARC is offering 1.175 of its shares for every Anzon share, valuing the target at about $708 million, or $1.87 per share.

The auction was initiated by Anzon last month after approaches from several parties.

Nexus was omitted from the auction, but was not deterred from plans for its own merger with Anzon, amassing a 17 per cent stake in the target.

Nexus managing director Ian Tchacos said yesterday there were a number of options, including the opportunity for its own takeover offer.

"We've got quite a few potential moves. Right now, obviously, we're analysing the offer from ARC. We don't think it is a particularly strong one," Mr Tchacos said.

"In price and in ARC scrip, we certainly think we can match that offer with Nexus scrip.

"Ultimately, if we wanted to, we could wait until the end and sell our interest, but I think we would probably prefer to do something a little more constructive than that."

Mr Tchacos said the company would evaluate the offer in coming days and formulate "the optimal way forward for Nexus".

"As an Anzon shareholder we don't see that it's a particularly compelling proposal from ARC," he said.

ARC managing director Eric Streitberg said the proposed merger would create a leading oil and gas company that would be positioned for further consolidation in the energy sector.

Anzon executive chairman Steve Koroknay said the merger would provide a means for the company to expand.

"The single asset exposure and corporate structure, which has inhibited Anzon's ability to grow, will be resolved by the merger," Mr Koroknay said.

Anzon shareholders have three options to receive their consideration - all shares, cash and shares or maximum cash.

The oil producer's largest shareholder, British-listed Anzon Energy Ltd, which has a 53 per cent holding, has endorsed the deal in the absence of a superior offer. The merger is expected to be completed by the end of February.

The offer is subject to an independent expert's ruling that the deal is in the best interests of shareholders and is recommended in the absence of a superior proposal.