Paulson & Co., the hedge fund run by billionaire John
Paulson, and mutual fund firm Franklin Resources Inc. (
) are among foreign investors betting Canada will approve Cnooc
Ltd.'s $15.1 billion acquisition of Nexen Inc. (NXY.TO), according
to a Bloomberg report.
It said Paulson & Co., Franklin, Arrowgrass Capital Partners
LLP, Mason Capital Management LLC and Eton Park Capital Management
LP, all based outside Canada, bought shares in Calgary-based Nexen
in the third quarter, regulatory filings show. Ontario Teachers'
Pension Plan tripled its stake while T. Rowe Price Group Inc. and
Jarislowsky Fraser Ltd. sold, it added.
It said the purchases were made before Canada rejected a C$5.2
billion ($5.2 billion) bid by Petroliam Nasional Bhd. for Progress
Energy Resources Corp. (PRQ.TO) on Oct. 19, which cast doubt on the
Nexen deal. Nexen shares have risen since, with the spread between
China-owned Cnooc's $27.50 offer and shares of the Calgary-based
energy company the lowest since Oct. 18 as of Nov. 16, suggesting
investors are growing more optimistic the deal will be completed,
according to data compiled by Bloomberg.
"Most people believe that Nexen will get completed," said Sachin
Shah, a merger-arbitrage strategist with Tullett Prebon Americas
Corp. in Jersey City, New Jersey.
Hedge funds that bet on events such as mergers will probably buy
more Nexen stock once Hertz Global Holdings Inc.'s (
) US$2.6 billion purchase of Dollar Thrifty Automotive Group Inc. (
) closes and cash is freed up, Shah said last week in a telephone
interview. U.S. antitrust regulators approved the acquisition on