nexus ups its stake in merger target

AUSTRALIAN

Business

Nexus ups its stake in merger target

Nigel Wilson, Energy writer

December 06, 2007

NEXUS Energy's Ian Tchacos has played a late hand in his bid to be a player in the $1.1 billion Anzon/ARC Energy merger.

Nexus Energy disclosed yesterday it had lifted its stake in Anzon Australia from 17.84 per cent to 19.24 per cent by buying 5.2 million shares between October 25 and December 3 at an average price of $1.63.

On the market yesterday, Anzon's shares closed at $1.60, up 5c on the day.

The final terms of the proposed merger will be contained in a scheme of arrangement document to be mailed to shareholders next week.

Mr Tchacos has never been regarded as a passive investor, and appears to be seeking influence in the merged company. While some analysts suggested last night that the new stake was sufficient to block the merger, others pointed out that Nexus, with its previously announced commitments in the Bass Strait and the Timor Sea, could not afford a full takeover of Anzon.

Nexus believes it is the logical partner for Anzon, whose main asset is a 40 per cent stake in the Basker/Manta/Gummy development in Bass Strait, where Nexus is planning to develop its Longtom asset.

Anzon, which last year unsuccessfully proposed a $171 million merger with Nexus that was acrimoniously rejected, is the latter's major shareholder with 12.4 per cent.

Anzon earlier this year selected ARC as a preferred merger partner, after an extensive auction process from which Nexus was excluded, after not meeting the terms of the process because one of its shareholders, Norwegian company, Viking Shipping, was buying Anzon shares.

Anzon Energy, listed in the London Alternative Investment Market, owns 53 per cent of Anzon Australia. ARC is an equity partner in the BassGas project based on the Yolla gas field, also in Bass Strait, and has equity in the Cliff Head oilfield near Dongara in Western Australia, both of which were acquired earlier this year when ARC bought the Mitsui offshoot Wandoo Petroleum.

The WA-based company is undertaking an extensive exploration program in WA's onshore Canning basin, underpinned by a $40 million investment by Alcoa.