Uncertainty over Nexen deal plagues Canada’s oilpatch – by Claudia Cattaneo (National Post – September 19, 2012)

The National Post is Canada’s second largest national paper.

Next to the debate generated across Canada by the proposed takeover of oil producer Nexen Inc. by CNOOC Ltd., Thursday’s special shareholders meeting in Calgary to approve the transaction is expected to be a matter of only a few words.

Most shareholders are so thrilled with the $15.1-billion bid for the underperforming company they have already voted and few are expected to show up for the early-morning event in Calgary’s Metropolitan Centre — the few shareholders are expected to be outnumbered by the media.

Nexen chairman Barry Jackson will handle the formalities, then interim president and CEO Kevin Reinhart will have brief remarks — his first since the proposed sale of the senior company to a state-controlled Chinese entity was announced in July.

CNOOC will keep a low profile and Nexen’s 3,000 employees will get their turn later in the day to hear by conference call how they will be affected by the change in ownership.

Meanwhile, all eyes are on the political realm. Messages about how the federal government might react to the bid have been so mixed and so abundant no one is taking this deal’s closure for granted, as reflected in the broad discount between the bid price ($27.50 a share) and the share price ($24.67, down 8¢ on Wednesday).

U.S. investment managers are monitoring carefully what’s being said by the Prime Minister, his deputies and the NDP opposition. Investors looking at launching similar bids are taking stock of any new patterns. Lobbyists are reacting to any nuance that may point to a change in government sentiment.

The uncertainty is a reflection of how much the deal is dividing Canada as well as the ruling Conservative Party’s base because of its potential to further encourage the sale of Canadian oil and gas resources to state-owned enterprises from China. Some free-market champions are backing the deal because Canada is open for business, other free-market champions are worrying state-owned enterprises will adversely impact Canada’s open economy.

Even the transaction-intensive oil and gas industry is torn. In one camp are those who benefit — such as owners or shareholders in companies that hope to be the next to lock up big offers and want the influx of Asian cash to continue.

For the rest of this article, please go to the National Post website: http://business.financialpost.com/2012/09/19/uncertainty-over-nexen-deal-plagues-canadas-oilpatch/

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