Investor vows to vote against Encana moving HQ from Calgary to Denver
The Encana logo at the company's annual meeting in Calgary on April 30, 2019. (Jeff McIntosh / THE CANADIAN PRESS)
CALGARY -- A Canadian investment management firm with a four per cent stake in Calgary-based Encana Corp. says it will vote against Encana's plan to move its headquarters to the United States.
Letko, Brosseau & Associates Inc. says the planned move to Denver would lead to Encana's removal from S&P/TSX stock indexes.
That would mean investors holding Encana through indexed Canadian funds or with Canadian-only investment policies would have to sell Encana shares, a move the investor says would compound the 70 per cent decline in share price experienced since Sept. 30, 2018.
Encana recently announced the headquarters move as part of a reorganization that would include changing its name to Ovintiv, as well as a share consolidation.
CEO Doug Suttles, a Texan who lives in Denver, says the change in corporate home is meant to help the company tap into deeper pools of U.S. passive investor capital.
The changes require a shareholder vote to be held early next year.
"The proposed move is contrary to Encana's best interests and reflects a profound absence of concern for the protection and enhancement of shareholder value," charges Letko Brosseau in a statement.
"Further, Encana did not take or even appear to consider any steps to mitigate the adverse consequences to the company or its Canadian investors."
This report by The Canadian Press was first published Nov. 19, 2019.