SDX shareholder to block planned merger with Tenaz: A planned merger between UK-based, Egypt-focused SDX Energy with Canadian firm Tenaz Energy has been thrown into doubt after a group of shareholders said they would vote to block the transaction. SDX was sent a letter by trading group Aleph Commodities informing it that Aleph holds some 25.65% of SDX and intends to vote against the transaction at a meeting of shareholders scheduled for 29 July, SDX said in a statement to the London Stock Exchange.

Aleph says no: Fully 75% of shareholders need to okay the merger for it to go through, giving Aleph the power to block it, Tenaz said in a response filed to the London bourse.

The story so far: SDX agreed to the all-share takeover with Tenaz in May in a transaction that would value the London-listed company at around GBP 21.4 mn. SDX shareholders would receive roughly 0.075 shares in Tenaz for each SDX share, handing them ownership of around 36% of the new company. Tenaz shareholders would hold the remaining 64%. At the end of June, the companies announced a cash alternative that would allow SDX shareholders to receive cash instead of shares.

Why do we care? SDX owns 36.9% of the South Disouq concession in Egypt’s Nile Delta, and 50% of the West Gharib concession in the Eastern Desert, where it first struck oil last month.

Aleph doesn’t want to dilute SDX: “[We welcome] the opportunity to engage with management and the board of directors to explore opportunities to provide financial, commercial and technical support to SDX to ensure the growth of the company and its production base, with minimal dilution,” SDX reported Aleph as saying in the letter.

What’s next? Both SDX and Tenaz will go ahead with their shareholder meetings on 29 July to vote on the merger, though it now seems unlikely to go through. Tenaz said it was exploring all its options with regard to the transaction.