Progress Energy finalizes sale to Petronas
Federal government says it will approve the sale to Malaysia's state-run company
The votes are in and shareholders of Progress Energy Resources Corp. have overwhelmingly approved the sale of the Calgary-based intermediate oil and gas company to Malaysia’s Petronas.
Progress Energy announced last night that over 99 per cent of its shareholders approved of the $6 billion deal. And why wouldn’t they, considering the Petronas offer of $22 per share, which the company had to sweeten by $1.55 per share after Progress received another offer from an unidentified company, represents a hefty premium over what the shares were selling for when the sale was announced.
Just as critical as shareholder approval is the fact Progress Energy says the federal government will not oppose the deal under the Competition Act, which requires any takeover deals greater than $330 million to be of net benefit to Canada.
While there was never much question that the federal government would not approve this deal (the same can’t be said for the Cnooc Ltd.’s proposed $15.1 billion takeover of Nexen Inc.), scratching that item off the to-do list is a relief for Progress Energy, Petronas and Progress shareholders.
It will be interesting to see how the approval of the sale speeds up Petronas’ plans to build a liquefied natural gas (LNG) exporting terminal on British Columbia’s west coast. The proposed project is behind more advanced B.C. LNG export schemes being led by the likes of Apache Canada and Shell Canada.
And there is also concern that the window of opportunity for exporting Canadian LNG to Pacific Rim markets is closing. Australia in particular, is ramping up its LNG export capacity.