Tags: Nexen | Cnooc | Canada | China

Nexen Shareholders Approve Cnooc's Bid, But Concern Grows

Thursday, 20 Sep 2012 12:21 PM

Nexen Inc. shareholders overwhelmingly approved the oil producer's takeover by China's CNOOC Ltd. on Thursday, but the stock weakened as public opposition to a state-owned enterprise absorbing $15.1 billion of Canadian-owned assets appeared to grow.

Shareholder blessing of the deal had been seen as a formality, given the rich 61 percent premium that CNOOC offered on the price of Nexen's shares. But the shares remain well below the $27.50 bid price due to uncertainty over the chances of the Canadian government giving the transaction the green light.

Prime Minister Stephen Harper has actively wooed Chinese investment to help develop the country's energy resources, but recently even members of his government have broken ranks to publicly express discomfort with China taking such a large position, especially in the Alberta oil sands, one of the world's biggest deposits of crude oil.

The government has launched a review of the deal to determine whether it meets a murky "net benefit to Canada" test.

"I think that's healthy to have a good debate on whether this is in the best interest of Canada, so I'm not surprised we're getting all of those different views coming out," Kevin Reinhart, Nexen's interim chief executive, said following the vote.

"In terms of how the transaction unfolds, I'm not going to comment on that. The decision will be made behind closed doors, not in the public forum, hence we've stayed out of those conversations and will work with the regulators to make their decision."

Holders of Nexen's common shares voted 99 percent in favor of the deal, and preferred shareholders voted 87 percent in favor.

Nexen shares were down 9 cents at $25.23 on the New York Stock Exchange on Thursday and were unchanged at C$24.67 in Toronto.

A CNOOC spokesman said the company welcomed the results. It has promised several items aimed at making the deal palatable in Canada, including moving its Western Hemisphere headquarters to Calgary, maintaining all of Nexen's staff, and listing its shares on the Toronto Stock Exchange.

However, a poll released on Thursday appeared to show public support weakening. A Sun News-Abacus survey showed 69 percent of Canadians say Ottawa should not approve the takeover, up 12 percentage points from a similar poll conducted in August. The survey was conducted online with 1,208 participants between Sept. 14 and 18.

 

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Nexen Inc. shareholders overwhelmingly approved the oil producer's takeover by China's CNOOC Ltd. on Thursday, but the stock weakened as public opposition to a state-owned enterprise absorbing $15.1 billion of Canadian-owned assets appeared to grow.
Nexen,Cnooc,Canada,China
386
2012-21-20
Thursday, 20 Sep 2012 12:21 PM
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