Canadian oil firm MEG says Husky balked at friendly takeover talks
(Adds comment from Husky)
By Rod Nickel
WINNIPEG, Manitoba, Jan 18 (Reuters) - Canadian oil producer
MEG Energy Corp's CEO invited his Husky Energy Inc
counterpart 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
MEG Chief Executive Officer 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."
Husky spokesman Mel Duvall noted its offer expired without
the minimum tender condition being met.
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, Phil Berlowitz and Susan Thomas)
First Published: 2019-01-18 18:26:41
Updated 2019-01-18 19:57:33
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