On 05-Nov-09, Verenex Energy Inc. announced it had entered into a definitive arrangement agreement with the Libyan Investment Authority  pursuant to which the LIA, through a subsidiary, has agreed to acquire all of the Verenex shares issued and outstanding upon completion of the transaction at a price per share in cash equal to $7.09 plus an additional working capital amount per share. The definitive agreement comes (as expected by Panta Capital) after Verenex signed the binding memorandum of understanding with the Libyans on 18-Sep-09.

We believe that all remaining conditions of the agreement should easily be fulfilled:

- Shareholder approval: The agreement has been made subject to minimum shareholder approval of 75% of the votes cast at the EGM. Given that Vermillion (Verenex 45.2% shareholder) has agreed to accept the offer, we expect other shareholders to follow suit given the lack of other credible sale alternatives/being at the mercy of the Libyans. 
- Positive working capital amount: Based on preliminary estimates agreed to by the LIA, Verenex expects the Working Capital Amount to be a nominal amount of approximately $0.15 per share, assuming completion of the transaction in mid-December. 

Given the expected fulfilment of all conditions and the short duration of the deal (expected completion at mid-December 2009), we remain buyers at current CAD 7 levels to realize a minimum return of 1.2% (annualized 15.4%) with CAD 0 working capital proceeds distribution or return of 3.4% (annualized 41%) with CAD 0.15 (in line with Verenex management estimates) working capital proceeds distribution.