Nexen shareholders vote to approve Chinese takeover
Published Thursday, September 20, 2012 8:30AM EDT
Last Updated Thursday, September 20, 2012 10:19PM EDT
The bulk of Nexen Inc.’s shareholders have voted in favour of a takeover by China National Offshore Oil Company.
Common shareholders voted 99 per cent to approve the deal, while preferred shareholders voted 87 per cent in favour of it. The deal required two-thirds’ approval by both sets of shareholders.
CNOOC has offered $27.50 per share in cash for the Calgary-based oil and gas company, which has offshore oil and gas assets worldwide. It also has a stake in Alberta’s oilsands development, as well as shale gas operations in B.C.
The $15.1-billion deal still needs government approval under the Investment Canada Act.
Nexen’s interim chief executive Kevin Reinhart on Thursday said that under the deal CNOOC would keep Nexen’s name and widen the company’s role to manage assets as well as about $8 billion of the Chinese firm’s assets throughout North and Central America.
He also said CNOOC would seek a listing on the Toronto Stock Exchange and uphold Nexen's social responsibility programs.
"This transaction will in no way close the book on Nexen or our way of doing business," Reinhart said following the vote.
"Instead it will open up a new chapter in our proud history, one I believe has the potential to be as exciting as all the past ones."
According to Robert Schulz, a professor in petroleum land management at the University of Calgary, the takeover would have “a tremendous benefit, not only to Calgary and Alberta, but all of Canada.
“It seems as though CNOOC is further along in terms of corporate social responsibility, listening and discussing things before deals are made,” Schulz told CTV News Channel’s Power Play.
However, Alberta Tory MP Ted Menzies said he has been hearing negative comments about the takeover bid from constituents.
Meanwhile, Prime Minister Stephen Harper has suggested it remains to be seen whether Chinese state-run business standards are up to those in Canada.
According to NDP Energy and Natural Resources critic Peter Julian, CNOOC's environmental and human rights record has come into question, as well as its past performances with takeovers.
A rejection of the bid could impact Canada’s relations with China, Schulz said.
“I think it’s going to go back to square one, because there’s been a lot of signals that this deal is wanted by the Alberta government, the Alberta people and also many people in Canada,” he said.
“If this deal does not go through, jobs for people from Quebec, from the Maritimes, Nova Scotia, the Atlantic provinces that would have been held in the oil sands won’t go through. So this actually will be a decrease in jobs for Canada because the land is just going to sit there in my opinion. The expansion won’t go through.”
With files from The Canadian Press