Shares of OPTI Canada Inc. (TSX: T.OPC, Stock Forum) surged more than 33% (60 cents) to $2.40 in mid-afternoon trading Thursday on volume of more than 4.4 million amid speculation that the Calgary-based company might be taken over by Nexen Inc. (TSX: T.NXY, Stock Forum).
Nexen shares were up 11.4% on volume of almost 4 million to $24.82.
The two companies are partners in a $6.1 million oilsands project in Long Lake, Alberta. On October 30, they announced that they were postponing a decision to expand the project, citing the financial crisis and uncertainty over costs to curb carbon emissions.
On the OPTI Canada BullBoard, there was plenty of reaction to the speculation.
“I heard nexen bought out opti and optis phones were cut off,” said herbertjaye. “I never believed it but look at nexen stock is up.I am starting to believe it may be true.”
Not true, replied riker. “If there was the slightest serious buyout rumour, the stock would be up a lot higher, on a lot higher volume.”
Under the heading, “$10.18 target,” regoer noted, “OPC.TO is rated strong buy right now with the $10.18 target price in very short term. Might be the time to get in. Check here: 'http://canada.stoxline.com/q_ca.php?s=opc.to".
And perfectplay posted a Financial Times article speculating that Nexen was a takeover target.
“Shares in Nexen, the Canadian oil company, on Wednesday rose as much as 19% on speculation it would be taken over by a bigger rival, most likely Total of France.
“Nexen at one point on Wednesday (November 26) was trading as high as C$23.93, before retreating to close at C$22.28, up more than 10% on the day.
“The company was again at pains to state that it was not for sale. However, banking sources and people within the oil industry expect it will be targeted by a large oil group rich in cash but struggling to expand its production.
“The Financial Times last month revealed that Total was seriously considering a bid after Nexen’s shares lost more than half their value in the stock rout sparked by the credit crisis.
“Total would not comment on Wednesday night.
“Total examined Nexen last year but concluded it was too expensive. A banker close to Total Capital, an arm of Total, was reported by Reuters as saying the group planned a €1bn (US$1.3bn) five-year bond to finance a deal.
“Oil companies dislike hostile takeovers but bankers have not ruled out such a move in this case, suggesting Lazard might be working with Total on a deal.
“Nexen missed its production targets last year and its Long Lake oil sands project has been delayed. However, analysts said the company had good cash flow and assets, including a 7.23% stake in the Syncrude venture, fields in the Gulf of Mexico and the North Sea, and shale gas.
“A deal for Nexen could spark a wave of mergers and acquisitions, analysts said, pointing out that several US companies, such as Anadarko, Marathon and the UK’s BG were being eyed by companies such as Royal Dutch Shell, Eni and other larger rivals.
“This month, Statoil announced a US$3.4bn deal to take a stake in assets owned by Chesapeake Energy, the Oklahoma-based gas company.
“But bankers and analysts are expecting bigger deals, including takeovers of companies many of which are now trading at a significant discount to the sum of their assets.”
