Dissident investors in Nexus Energy appear set to scupper Kerry Stokes' $27 million takeover plan for the moribund oil and gas company, based on the flow of proxy votes ahead of next week's shareholder showdown.
With a vocal block of shareholders opposing the Stokes-controlled Seven Group Holdings' takeover bid because they claim the 2 cents bid price is too low, it sets the scene for administrators to be appointed to Nexus as early as Thursday.
Nexus placed its shares, at 1.7 cents, in a trading halt at 1.21pm yesterday while it prepared an update on the takeover. Four hours later it advised the market that based on the receipt of 705 million proxy shares - equivalent to 53 per cent of Nexus' issued stock - the SGH takeover resolution to be put at Thursday's shareholder meeting in Melbourne would fail.
The takeover, structured as a scheme of arrangement, requires 50 per cent of voting shareholders to support the deal, along with 75 per cent of shares voted.
Nexus last night said the proxy volumes meant the first hurdle - a majority of voting shareholders - was likely to be met. But the votes lodged against the SGH deal totalled more than 25 per cent and threatened to scupper the deal "unless sufficient Nexus shareholders that have already lodged proxy votes change their vote".
Having persistently warned shareholders that failure to support the takeover would likely leave them empty handed, Nexus said SGH had told it it would withdraw financial support following Thursday's meeting. This would force Nexus to appoint appoint administrators.
SGH has the upper hand because it is Nexus' biggest secured creditor. It is a fact that has further infuriated Nexus' dissident investors, led by Bechtel senior executive Andrew Greig who holds a 10.6 per cent stake.
An independent expert report by Deloitte that declared the SGH offer "fair and reasonable" has failed to placate the Greig group.
"SGH has advised Nexus it will seek to acquire all of Nexus' shares or some or all of Nexus' assets through the administration or enforcement process," Nexus said.
"As set out in the independent expert's report . . . the 'calculated preferred value' of a Nexus share under an 'orderly realisation of assets' is nil."