Nexus Energy has defended the value of Seven Group Holdings’ $27 million takeover offer after shareholders queried an independent expert’s report that has described the offer as “fair and reasonable”.
One of the shareholders is Bechtel Group executive director Andrew Greig, whose personal holding makes him the biggest Nexus shareholder. He recently increased his stake, suggesting he may be preparing to vote against the Seven bid at a June 12 meeting.
As revealed in The Australian yesterday, Mr Greig has sent a letter citing concerns over the handling of the bid to Seven chief Don Voelte, who stood down as Nexus chairman about a month before the deal with Seven was signed.
Mr Greig also said the independent expert’s valuation of Nexus’s stake in the Shell-controlled Crux gasfield off Western Australia — the most valuable Nexus asset — appeared “flawed” and too low at $160m-$200m.
“Following the release of the scheme booklet, there have been two shareholder queries received in relation to the valuation of the Crux asset,” Nexus said.
It issued a statement from the independent expert it commissioned to do the report, Deloitte, backing the valuation.
Deloitte directors Stephen Reid and Robin Polson said the valuation had taken into account future cashflows, abandonment costs, trading of other companies with comparable assets, the Crux book value and offers Nexus had received when it tried to sell the stake.
“The company has undertaken a divestment process ... which did not result in any reasonable offers for Longtom (gasfield in Bass Strait), Crux or the entire company, other than the offer from Seven,” Deloitte said.
“It is difficult to attract interest in Crux, as Shell and (partner) Osaka have a pre-emptive right to acquire Nexus’s 15 per cent interest in the asset, which is a significant deterrent.”
Deloitte has said Nexus shares will probably be worthless if the Seven scheme of arrangement is voted down and the company is forced into administration.
On Thursday and Friday last week, Mr Greig increased his stake in Nexus from about 6 per cent to 11 per cent as shares resumed trading after a three-month hiatus and slumped by two-thirds to just below Seven’s 2c-per-share bid price.
An activist group run by small investor Sean Wilson to vote down the deal, through a website www.nexusbattle.com, claims to have indicative support from more than 14 per cent of shareholders, and that does not include Mr Greig.
If the support eventuates, and Mr Greig votes against it, the scheme would be scuttled and Nexus’s assets would probably go on the auction block if no other bidder emerged.