DataRoom AM: Nexus bargain blues

Stubborn Nexus Energy shareholders may snub a lowball offer from Seven Group, while Wesfarmers has reportedly taken a shine to AGL Energy.

Nexus Energy is staring down administration as a small, but significant, core of shareholders vote against Seven Group’s bid for control of the company. The energy group’s board is pleading with stockholders to reconsider, but it’s unlikely pragmatism will rule over principle.

Elsewhere, Wesfarmers may have its eye on a local energy giant, the NSW government looks to shore up privatisation plans, ANZ Bank and National Australia Bank continue to assess options for offshore divestments and Hoyts joins the IPO queue.

Nexus Energy shareholders remain firmly stuck between a rock and a hard place, left to accept a lowball 2c a share bid from Seven Group or else enter administration. The question they are asking themselves is do we hold out on moral grounds, frustrating Seven, which has tried to ruthlessly swoop on the wounded group, or do we accept the bid knowing it is likely the only hope of getting anything back for our investment (even if it may be a pittance)?

Not an easy choice, but a small core of large shareholders appear convinced principle should rule over the pragmatism of acceptance. As it stands over 25 per cent of voting shares have been cast in the negative, leaving Thursday’s official vote very likely to end in failure for Seven. As a result it may need to go through administrators to claim the firm’s assets.

Meanwhile, Wesfarmers is believed to have run the ruler over a $10bn takeover offer for AGL Energy in a deal that would stir plenty of attention. The reported interest comes on the back of speculation of a bid for hospital operator Healthscope and could even extend to interest in AGL rival Origin Energy.

An offer admittedly appears unlikely, but a war chest -- like the $3bn-plus one Wesfarmers has built up -- brings you into the rumour mill for most takeover targets and expect plenty more gossip before Richard Goyder finally opens the group’s checkbook on a deal.

Speaking of Wesfarmers, one of the conglomerate’s liquor retailers, Vintage Cellars, remains at the centre of takeover speculation as reports surface that Metcash could be involved in a bid. According to The Australian Financial Review, a private equity consortium approached the grocery wholesaler after testing the waters on Coles’ interest in offloading Vintage Cellars. The paper also linked Tony Leon, a former boss of Dan Murphy’s and Coles, to the tyre kicking.

In finance, ANZ Bank is again mulling the sale of its 39 per cent stake in Indonesia’s Panin BankGoldman Sachs is advising the bank as it looks to rid itself of minority stakes in the Asian region.

Earlier this year ANZ’s plan to offload the near $700m stake in Panin to Mizuho Financial Group fell through after months of negotiations.

Elsewhere, National Australia Bank’s hopes of selling its UK assets have received a minor boost as British bank Lloyds proceeds with a float of banking arm TSBCredit Suisse analyst Jarrod Martin said a positive response to the TSB listing would open the door to a NAB divestment at a price that would be “positive” for its local stock.

In the IPO market, Pacific Equity Partners is pushing forward with a $500m float of cinema operator Hoyts, according to the AFR. Investment banks will reportedly pitch for a seat at the table in coming weeks ahead of an IPO later in the year.

Finally, it appears all systems go with power privatisation in New South Wales as the government prepares to accept bids for the Delta Coastal generators. The auction has attracted the interest of about six suitors amid speculation of an $800 million deal.

Meanwhile, Premier Mike Baird will call a special party room meeting to seek backing for the privatisation of electricity distribution assets worth $36.5bn. Support from the party room will see Baird take the plans to voters at the March election.