The final proposal from Arc is expected to be table tomorrow. Nexus, or any other party, will be free to trump it with a higher bid, but the Arc proposal seems likely to go ahead, creating a new $1.1 billion Australian petroleum company.

No merger can proceed without the approval of Anzon’s parent company, UK-based Anzon Energy.

Anzon tried to acquire Nexus last year in a hostile takeover. After that bid failed, the company reconsidered its options.

The Anzon board decided that being essentially a one-asset company was restricting Anzon’s growth and the time had come to look at a merger.

Nexus was keen to turn the tables and acquire Anzon. But after talks broke down earlier this year, it opted to build a stake through its major shareholder Viking Shipping, which was buying Anzon shares.

Meanwhile, Arc knocked on the front door, joining other numerous other suitors in submitting a tender process and signing a confidentiality agreement.

Anzon opened its data room to these interested parties, and now several months later, Arc has won the tender.

At first glance, there are greater synergies between Nexus and Anzon, which both have offshore Gippsland holdings, including some shared permits, than between Arc and Anzon.

But Arc says its Western Australian and BassGas gas assets are complementary to Anzon’s Basker Manta Gummy project. BMG will need significant investment in order to move into its next phase, and making this investment would allow Arc to avoid paying Petroleum Resource Rent Tax on its producing assets.