ARC Energy is standing by its plan to pursue a $1.1 billion merger with Anzon Australia Ltd despite attempts by one of its biggest shareholders, Clive Palmer's Mineralogy Pty Ltd, to oust the current board and scrap the merger.
ARC Energy is standing by its plan to pursue a $1.1 billion merger with Anzon Australia Ltd despite attempts by one of its biggest shareholders, Clive Palmer's Mineralogy Pty Ltd, to oust the current board and scrap the merger.
Queensland-based Mineralogy, which is also a majority shareholder in iron ore developer Australasian Resources Ltd, is seeking a general meeting to remove all of ARC's directors and scrap the proposed $708 million merger with Anzon.
Mineralogy holds a 6 per cent stake in ARC.
ARC managing director Eric Streitberg said the company's merger plans had received "general support" from its shareholders.
Mr Streitberg said the proposed merger is in the "best interests of all shareholders and is consistent with ARC's strategy of building an appropriately balanced portfolio of assets".
ARC has 21 days within which to call the requested general meeting and Mr Streitberg said the company would discuss the proposed resolutions with Mineralogy.
Anzon selected ARC as a preferred merger partner after an extensive auction process.
The merger is also under pressure from Anzon's second largest shareholder, Nexus Energy Ltd.
Nexus was omitted from the auction process, but was not deterred from its own merger plans with Anzon, amassing a 17 per cent blocking stake in the target.
The full text of an ARC announcement is pasted below
ARC Energy Limited ("Company") notes the article in today's Australian Financial Review concerning Mineralogy Pty Ltd ("Mineralogy").
The Company confirms that it has received from Mineralogy a notice requesting that the Company call a general meeting. Mineralogy has proposed four resolutions to be considered by the general meeting. The resolutions proposed by Mineralogy are not in a form suitable for determination by a general meeting. The intended effect of these resolutions, if passed, would be to remove all of the current Directors of ARC and replace them with nominees of Mineralogy and prevent ARC from proceeding with its previously announced merger with Anzon Australia Limited ("Anzon") and Anzon Energy Limited ("AEL").
The Company has 21 days within which to call the general meeting requested by Mineralogy. During this time the Company intends to discuss the resolutions proposed by Mineralogy with them and, if the request for the general meeting and/or the resolutions are not withdrawn during this period, modify the resolutions such that they are in a form suitable for determination at a general meeting.
Mineralogy currently holds 19,364,709 shares in the Company, representing 6.0872% of the Company's ordinary shares. Mineralogy has acquired this stake over the period from July 2007 to the present, with an average entry price of $1.51 per share.
The Company notes that it has received general support from its shareholders and from analysts for its proposed merger with Anzon and AEL, and for the Company's strategic direction generally. The Company believes the proposed merger is in the best interests of all shareholders and is consistent with ARC's strategy of building an
appropriately balanced portfolio of assets with exposure to low risk, long run production, very significant near term appraisal potential and high upside exploration.
