We're inching closer to banana republic status each day - rules can be rewritten on the fly (not that PrimeWest's sale has any spurious correlation to last fall's trust taxation plan by the feds... nah). Can someone import some warm weather at least so that when there's no oil and gas finance going on in Albertastan, I can at least ride my bike more?
PrimeWest Units Fall on Possible Takeover Restriction (Update1)
By Ian McKinnon
Oct. 3 (Bloomberg) -- PrimeWest Energy Trust units fell as much as 7.5 percent after a report Canada's government may create a national security test for takeovers to block the Canadian oil producer's acquisition by a United Arab Emirates company.
The Calgary-based trust's units fell 65 cents, or 2.5 percent, to C$25.65 at 12:03 p.m. in Toronto Stock Exchange trading. The units earlier dropped as low as C$24.32, below the takeover bid of C$26.75 a share.
Canada's policy statement would allow Industry Minister Jim Prentice to block the planned purchase of PrimeWest for about C$4 billion ($4.02 billion) by Abu Dhabi National Energy Co., Canadian Press reported yesterday, citing anonymous sources. The revised legislation may come as soon as next week, it said.
The U.S. Senate in June ramped up congressional oversight of foreign investments in domestic companies. China's Cnooc Ltd.'s proposed takeover of Unocal Corp. in 2005 sparked national security concern and opposition by U.S. lawmakers. Chevron Corp., the second-largest U.S. oil company, bought Unocal with a bid $700 million less than Cnooc's offer.
Abu Dhabi National, a Middle Eastern power generator and oil producer controlled by the United Arab Emirates, announced the PrimeWest acquisition on Sept. 24. The offer represents a 34 percent premium to the trust's closing price on Sept. 21.
A telephone call to PrimeWest spokesman George Kesteven was not immediately returned.
Canadian Acquisitions
This is the third Canadian purchase this year by the Middle Eastern company known as Taqa. Taqa is expected in November to close its acquisition of Pioneer Natural Resources Co.'s Canadian assets for $540 million. In August Taqa completed a $2 billion purchase of Pogo Producing Co.'s Canadian unit, Northrock Resources Ltd.
The Canadian government's policy statement will focus on key industries such as energy and distinguish between private-sector investments and those made by government-owned companies, Canadian Press said, without identifying its sources.
The takeover of PrimeWest by the state-owned company ``will be reviewed, as others would, under the Investment Canada Act,'' Prentice said Sept. 24 in an interview.
To contact the reporter on this story: Ian McKinnon in Calgary at imckinnon1@bloomberg.net .
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