An oil rig of CNOOC (China National Offshore Oil Corporation) sits in Bohai Bay, China, in October 2007. THE CANADIAN PRESS/AP, Imaginechina
CALGARY - The results of a shareholder vote on a proposed Chinese takeover of Nexen Inc. (TSX:NXY) are expected today, although it's unlikely investors will reject the $15.1-billion offer from China National Offshore Oil Company.
Even if they approve the offer of $27.50 per share in cash, which was well above the stock's market price when the friendly deal was announced July 23, the transaction will require approval from the Canadian government.
Nexen shares closed Wednesday at $24.67 on the Toronto Stock Exchange. The large gap between the market price and CNOOC's offer, so close to the vote, reflects investor uncertainty that the deal will be completed as contemplated.
Canada's junior finance minister, Alberta MP Ted Menzies, said earlier this week he's getting a lot of negative feedback about the takeover of such a large Canadian oil producer by a state-owned Chinese firm.
Prime Minister Stephen Harper also said earlier this month that China needs to show its state-run enterprises can be trusted to play by the same rules as Canada.
He made the remarks before meet with Chinese President Hu Jintao at an economic summit for leaders of countries in the Asia-Pacific region — an area with great trade potential for Canada.
Harper said he wants Canada to deepen economic relations with China but that relationship must be a two-way street, or "win-win to use the Chinese expression."
A special meeting of the oil and gas producer's shareholders is scheduled to begin in Calgary at 8 a.m. local time (10 a.m. Eastern Time).