Nexen votes for takeover
Shareholders approve $15.1-billion offer from Chinese oil producer
CALGARY— The head of Nexen Inc. pitched the benefits of a takeover by a Chinese company Thursday even as the Calgary-based oil and gas company’s shareholders ovewhelmingly voted to support the politically charged deal.
Still faced with the task of winning approval from the federal government, interim chief executive Kevin Reinhart said the takeover wasn’t the end for Nexen — which is active in Alberta’s oilsands, the North Sea and elsewhere.
Reinhart said China National Offshore Oil Company will keep the Nexen name and expand the role of the company’s Calgary headquarters to manage not just Nexen’s assets but also some $8 billion of the Chinese company’s other assets in North and Central America.
“This transaction will in no way close the book on Nexen or our way of doing business,” Reinhart told shareholders after the vote to approve the deal. “Instead it will open up a new chapter in our proud history, one I believe has the potential to be as exciting as all the past ones.”
The $15.1-billion takeover still requires approval by Ottawa under the Investment Canada Act. The deal faces the key “net benefit” test that tripped up BHP-Billiton’s hostile takeover bid for Potash Corp. of Saskatchewan.
Meanwhile Thursday, Canada’s spy agency is warning purchases such as CNOOC’s takeover of Nexen can pose a threat to national security.
In its latest annual report, the Canadian Security Intelligence Service says the majority of foreign investment in Canada is carried out in an open and transparent manner.
However, the report says certain stateowned enterprises and private firms with close ties to their home governments have pursued opaque agendas or received clandestine intelligence support for their Canadian pursuits.
The CSIS report, tabled in Parliament, says that when foreign companies with ties to foreign intelligence agencies or hostile governments try to acquire control over strategic sectors of the Canadian economy, it can represent a threat to security interests
Concerns have also been raised by Alberta Tory MP Ted Menzies, who has said he’s been getting a lot of negative feedback from constituents about the takeover by a state-owned Chinese firm. Prime Minister Stephen Harper has also said that China needs to show that its state-run enterprises can be trusted to play by the same rules as Canada.
NDP Energy and Natural Resources critic Peter Julian said concerns have also been raised about CNOOC’s environmental and human-rights history as well as its record in other takeovers. “I think the public is losing confidence in the Harper government’s ability to handle in a transparent way this particular acquisition,” Julian said. “A lot of Canadians are concerned about the process and they don’t see the federal government responding, consulting or listening in any way.” Julian said Ottawa failed to deliver on promised changes to the Investment Canada Act review process after the Potash Corp. deal was killed, and now the same problems are happening again. Nexen shares rose to $24.72 at the close of trading on the Toronto Stock Exchange on Thursday.