50% chance a rival bid comes in for Progress Energy: CIBC
Company was initially put in play by a multi-national
Could an international oil company swoop in with a rival offer for Progress Energy Resources Corp. now that Malaysia’s bid for the Calgary gas producer has been temporarily shelved?
Maybe, says CIBC World Markets analyst Jeremy Kaliel. In a note this morning, he says there’s a 25 per cent chance that Petronas is able to salvage its bid for Progress.
It’s more likely, he says, that an international oil company steps forward with a rival bid.
“We see at least a 50% probability that an IOC better positioned to meet a net benefits test comes in with a bid price comparable to that of Petronas,” the analyst told clients, cutting his price target on Progress to $17 from $22 previously.
The likelihood of another offer materializing for Progress – whose shares tumbled this morning – is not outside the realm of possibility.
The company was initially put in play by a multi-national with which it held a series of discussions, it said in its bid circular. A rival offer, meanwhile, forced Petronas to sweeten its offer for Progress.
The multi-national in question was rumored to have been Exxon Mobil Corp., which said last week that it would buy another junior, Celtic Exploration Ltd., for $3.1 billion including Celtic’s debt.
That could leave Shell Canada Ltd. as a lone suitor. The company has said it will fulfill future gas requirements for its massive coastal export venture, in part, with “future net acquisitions.”