Kerry Stokes’ attempt to grab control of Nexus Energy (NXS) is dead and won’t be approved at a shareholders meeting tomorrow, judging by the 35% slump in the company’s share price yesterday, and a small rise in the price of Stokes’ Seven Group Holdings (SVW).
Nexus shares closed at 1.1 cents, well below Seven Group Holding’s 2 cent a share offer.
The shares fell 29% at one stage, and then fell again in late trading after proxies for Thursday’s meeting closed yesterday at 11am.
A 2.3%, 18 cent price rise (to $7.96) for Seven Group Holdings shares told us the market is happy with the prospect of the Nexus bid failing.
Rejection of Seven’s $26.2 million offer will see Nexus forced into administration and possibly hand control of its best asset to Shell.
Proxy votes for the scheme of arrangement for Seven Group’s takeover will be voted at a meeting of Nexus shareholders in Melbourne on tomorrow.
Nexus already warned last Friday that enough votes against the deal had been received for fail to win approval at the meeting.
Approval is required from 75% of shares voted at the meeting (like the Westfield Retail Trust meeting) for the Seven deal to proceed.
NXS 1Y – Nexus deal looks deader than dead for Kerry Stokes
Nexus and Seven have been warning Nexus shareholders that they risk receiving nothing if the takeover deal is voted down. As of last Friday more than 25% of the proxies received were against the deal going ahead.
However several dissident shareholders have said they are prepared to get nothing for their shares as a way of highlighting their opposition to the deal, which they claim significantly undervalues Nexus.
Nexus has also warned that its board would need to place the company into voluntary administration should the deal be voted down.
Seven, which holds Nexus’ senior debt, has said it would seek to acquire all of Nexus’s shares or assets should that occur, in order to secure its interests.
Nexus’s key asset is a minority stake in the Crux gas and condensates field in the Browse Basin, off the northwest WA coast which is controlled by oil giant Royal Dutch Shell.
Shell has a pre-emptive right over Nexus’s stake in Crux, but could also be able to assume control of Nexus’s interest in the event Nexus was unable to pay its share of costs under a joint venture agreement.
The only way for the deal to get up will be for Seven Group to lift its offer.
A higher offer will put downward pressure on Seven Group shares.
