PetroKazakhstan shareholders approve Chinese takeover
Deal still faces several obstacles Judge to rule on sale on Oct. 26
CALGARY— Shareholders of PetroKazakhstan Inc., a Calgarybased company that produces oil in Kazakhstan, have approved a proposed $ 4.18 billion ( U. S.) takeover bid from China National Petroleum Corp., China’s largest oil company.
Shareholders voted 99 per cent in favour of the transaction yesterday. China National, or CNPC, agreed Aug. 22 to pay $55 a share for the Calgarybased company. A Calgary judge said yesterday afternoon he won’t rule until Oct. 26 on whether the sale can proceed. The purchase allows “shareholders to consolidate the gain that they have made on their investment and which they deserve because it was a risky proposition and there has been some stress from time to time,” chairman Bernard Isautier, 63, told reporters after the vote in Calgary. CNPC said Monday it agreed to sell a 33 per cent stake in PetroKazakhstan to state- owned KazMunaiGaz in an attempt to ease government opposition to the purchase. China has been scouring the globe to secure oil supply to fuel its quickly expanding economy. PetroKazakhstan last year produced about 12 per cent of Kazakhstan’s daily oil output. Kazakh President Nursultan Nazarbayev on Oct. 15 signed changes to a law that will let the government block sales in oil and gas companies, according to a statement on the president’s website. The bill was approved by parliament on Oct. 12. Another potential obstacle may come from legal actions by OAO Lukoil, Russia’s largest oil company. The Moscow-based company is asking an Alberta court to postpone the takeover until its case in a Stockholm arbitration court is resolved.
Lukoil said it filed with the Stockholm Chamber of Commerce, claiming a shareholders’ agreement gives it the right to buy out PetroKazakhstan’s half ownership of a joint venture that also produces oil in the Central Asian country. The change in ownership doesn’t trigger any buying rights to PetroKazakhstan’s stake in the venture, called CJSC Turgai Petroleum, said Daniel McDonald, a lawyer from Burnett Duckworth & Palmer LLP, who represented the Canadian producer in court.
Neil Wittmann, associate chief justice of the Court of Queen’s Bench of Alberta, said he would issue a written ruling on Oct. 26.
Legal approval of the purchase would have enabled PetroKazakhstan to complete the deal today, Isautier said at the shareholders’ meeting.
“ We’ll wait and see,” was the only comment from PetroKazakhstan chief executive Graeme Phipps following the judge’s decision after more than four hours of arguments.
Shares of PetroKazakhstan fell 9 cents to $64.01 in Toronto Stock Exchange trading. The stock has risen about 60 per cent since the company announced June 27 it would consider takeover bids.