The departure of Nexen Inc's (
) chief executive officer is leaving the door open for a takeover
that may reward shareholders with a $3.3 billion windfall,
Bloomberg reported. Meanwhile, NXY is up 1.5% at around $18 on the
Bloomberg said the Canadian oil and natural-gas producer that
failed to find a buyer last year climbed the most in three months
with this week's announcement that CEO Marvin Romanow was exiting
immediately. Once worth as much as C$22.8 billion ($22.4 billion),
Nexen declined 20% during Romanow's three-year tenure and last
month fell to 0.92 times book value, the lowest in at least 16
years, according to data compiled by Bloomberg.
While Calgary-based Nexen has faced setbacks with oil-sands
projects such as its Long Lake operation in Alberta, it's now
cheaper relative to earnings than 96% of North American oil
exploration and production companies with market values greater
than $1 billion, data compiled by Bloomberg show. The $9.4 billion
company with oil and gas operations from West Africa to the North
Sea may fetch at least a 35% premium in a takeover, Edward Jones
& Co reportedly said.
"You've removed one more stumbling block with the CEO leaving,"
Timothy Parker, a Baltimore-based portfolio manager who oversees
about $4.5 billion in natural-resource stocks for T. Rowe Price
Group Inc., Nexen's largest shareholder, reportedly said. "It's
cheaper than average and so there is appeal there for an acquirer
because you could likely buy it at an accretive price. You could
pay a good premium and it could still be accretive."
Davis Sheremata, a spokesman for Nexen, reportedly declined to
comment on takeover speculation.
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