Canada's Pipestone Energy shareholders approve proposed sale to Strathcona

By Tanay Dhumal

(Reuters) -Pipestone Energy's shareholders on Wednesday voted in favor of the proposed sale to privately-held larger rival Strathcona Resources in an all-stock deal that would value the combined company at C$8.6 billion ($6.36 billion).

The Canadian company said the proposal has been passed by at least 66.7% votes in favor of the deal.

"I think people are going to wake up with a more diversified business on a larger asset scale," said Cole Smead, CEO and Portfolio Manager at Smead Capital Management, which owns shares in the company and voted in the merger.

"I'm just throwing it out as a theory, but I would not be shocked to see Strathcona do two deals next year alone. So I think we're going to see activity pick up as it should."

The deal had come under scrutiny earlier this month after Pipestone's second-largest shareholder GMT Capital said it would vote against the buyout as it undervalues the oil producer.

Upon closing of the transaction, which is expected in October, Strathcona would become a public company.

($1 = 1.3524 Canadian dollars)

(Reporting by Tanay Dhumal and Seher Dareen in Bengaluru; Editing by Krishna Chandra Eluri, Shilpi Majumdar and Shweta Agarwal)