ARC Energy Ltd has negotiated deals to buy oil producer Anzon Australia Ltd and its UK parent company Anzon Energy Ltd, creating a merged group with a market value of about $1.1 billion.
ARC Energy Ltd has negotiated deals to buy oil producer Anzon Australia Ltd and its UK parent company Anzon Energy Ltd, creating a merged group with an expected market value of about $1.1 billion.
The proposed deals will create a substantial mid-cap oil and gas producer with a diversified portfolio of production and exploration assets in Bass Strait, the Perth Basin and the Canning Basin.
ARC's Perth-based management will continue to run the merged group, though it will be majority owned by shareholders of Anzon Australia and Anzon Energy.
The deals have been structured to try and stop Nexus Energy Ltd, which has a 17.84 per cent stake in Anzon Australia, from playing a blocking role.
In particular, ARC's deal to buy Anzon Energy means it will acquire a majority stake in Anzon Australia.
The two deals will each be implemneted via a scheme of arrangement.
ARC will offer 1.175 shares for each of Anzon Austalia's shares, and will also be offering cash-and-scrip options.
AIM-listed Anzon Energy, which has a 53.1 per cent shareholding in Anzon Australia, intends to accept the offer.
The agreed deal values Anzon Australia at $708 million, or $1.87 per share, which is a 55 per cent premium to its share price prior to takeover speculation arising in August.
Separately, ARC intends to offer an estimated 2 ARC shares for each of Anzon Energy's shares, with the final formula yet to be determined.
This values Anzon Energy - whose sole asset is its stake in Anzon Australia - at 178 million pounds (A$410 million).
ARC said that Anzon Australia shareholders will hold 50-56 per cent of the merged group, depending on the take-up of the cash option, an that Anzon Energy shareholders will hold 31 per cent of the merged group.
"The Anzon board's support of the merger represents the conclusion of the strategic review process," the company said in a statement.
Anzon Australia initiated an auction last month after a series of approaches from several parties, rumoured to include Santos Ltd, Origin Energy Ltd and Australian Worldwide Exploration Ltd.
"The merger with ARC provides the best outcome for all Anzon shareholders," Anzon said.
The offer is subject to an independent expert's report finding that the deal is in shareholders' best interests and is recommended in the absence of a superior proposal.
Nexus Energy Ltd, which was omitted from the auction, this week increased its stake in Anzon to 17.84 per cent.
