From Financialpost · · 1m 20s
Cenovus Acquires Athabasca Oil for $5.8 Billion
Cenovus buys Athabasca Oil for $5.8 billion, expanding oil sands operations.
In brief
Cenovus buys Athabasca Oil for $5.8 billion, expanding oil sands operations. Cenovus Energy Inc. agreed to purchase Athabasca Oil Corp. for $5.8 billion, adding 45,000 barrels of oil equivalent per day to its output. Originally reported by Financialpost.
Deal Announcement
Cenovus Energy Inc. agreed to buy Athabasca Oil Corp. for about $5.8 billion, expanding its footprint in the Canadian oil sands.
Purchase Terms
The Calgary-based company agreed to pay $12 per share for Athabasca in the cash-and-stock deal, adding 45,000 barrels of oil equivalent a day to output.
Share Price Impact
The per-share value represents a 13 per cent premium to Athabasca’s closing price on Oct. 2, with Cenovus shares falling as much as 4.4 per cent and Athabasca surging 15 per cent.
Strategic Rationale
Cenovus chief executive Jon McKenzie stated the transaction strengthens its position in one of the world’s premier oil-producing regions and is a natural extension of its oil sands strategy.
Funding and Timeline
The cash portion, accounting for 65 per cent to 75 per cent of the transaction, will be funded with cash on hand and short-term borrowings, closing in December pending regulatory and shareholder approvals.
Regulatory and Approval Process
The deal has been unanimously approved by both companies’ boards and is expected to close in December, pending regulatory and Athabasca shareholders’ approvals.
In short
Cenovus Energy Inc. agreed to purchase Athabasca Oil Corp. for $5.8 billion, adding 45,000 barrels of oil equivalent per day to its output.
