Exclusive: Canadian oil firm MEG says Husky balked at friendly takeover talks

By Rod Nickel WINNIPEG, Manitoba (Reuters) - The chief executive officer of Canadian oil producer MEG Energy Corp invited his counterpart at Husky Energy Inc earlier this month to negotiate a friendly takeover of MEG but Husky did not follow up, MEG's vice president of investor relations, John Rogers, said on Friday. Husky abandoned its hostile bid for MEG on Thursday, saying it could not win sufficient MEG shareholder support after Alberta's government ordered production cuts to reduce a crude glut. MEG CEO Derek Evans phoned Husky CEO Rob Peabody in early January and invited him to visit and discuss a possible friendly deal to sell MEG, Rogers said

Reuters January 19, 2019 00:05:49 IST
Exclusive: Canadian oil firm MEG says Husky balked at friendly takeover talks

Exclusive Canadian oil firm MEG says Husky balked at friendly takeover talks

By Rod Nickel

WINNIPEG, Manitoba (Reuters) - The chief executive officer of Canadian oil producer MEG Energy Corp invited his counterpart at Husky Energy Inc earlier this month to negotiate a friendly takeover of MEG but Husky did not follow up, MEG's vice president of investor relations, John Rogers, said on Friday.

Husky abandoned its hostile bid for MEG on Thursday, saying it could not win sufficient MEG shareholder support after Alberta's government ordered production cuts to reduce a crude glut.

MEG CEO Derek Evans phoned Husky CEO Rob Peabody in early January and invited him to visit and discuss a possible friendly deal to sell MEG, Rogers said.

"We approached them and said, 'You know with a little bit of negotiation, I'm sure we can find a way out of this,'" Rogers said, recalling MEG's invitation. "They never got back to us."

A Husky official said he could not immediately comment.

Publicly, Husky continued to urge MEG shareholders to tender to its offer leading up to its expiry this past Wednesday.

Husky was expected to secure over 50 percent support from MEG shareholders, sources told Reuters and other media outlets on Wednesday. It was expected to consider extending its offer to win the required two-thirds.

Instead, it allowed it to expire, citing Alberta's curtailment orders and a lack of progress expanding pipelines as recent negative developments. Husky has not said publicly how much support it received.

Husky's surprise decision to abandon its bid "may dent its credibility," RBC analyst Greg Pardy said in a note.

MEG had issued an earlier invitation to Husky in November to sign a confidentiality agreement and enter its data room, Rogers said. Husky did not take MEG up on it, although several other companies did, he said.

No rival bids were made.

MEG's spurned invitations suggest that Husky's commitment to the deal may have wavered after conditions in Canada's oil patch deteriorated. Discounts on Canadian oil hit record-high levels in October, leading the Alberta government to order the curtailments, which Husky has criticized.

Rogers said he did not believe MEG was in play any longer, despite a 36 percent selloff of its stock on Thursday that could make the heavy oil producer a bargain buy.

(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jeffrey Benkoe and Phil Berlowitz)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.