|Bid||3.3800 x 45900|
|Ask||3.3900 x 1300|
|Day's Range||3.1500 - 3.4550|
|52 Week Range||1.4100 - 10.5200|
|Beta (5Y Monthly)||3.60|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Mar. 12, 2020|
|1y Target Est||10.85|
Analysts say oil companies should team up to address lower energy demand brought on by COVID-19, but one says a single-digit premium should have been enough to nab Husky.
(Bloomberg) -- Cenovus Energy Inc. is getting more than just a rival Canadian oil producer with its acquisition of Husky Energy Inc. It’s also shoring up its defenses against an anti-oil sands movement that could get a boost if Joe Biden is elected as the next president of the U.S.Calgary-based Cenovus said Sunday morning it’s reached a C$3.8 billion ($2.9 billion) all-share deal to buy Husky, which is controlled by Hong Kong billionaire Li Ka-shing. Li and his CK Hutchison Holdings Ltd. will own about 27% of the combined firm if the deal goes through.Oil sands companies in Alberta sell their crude at a discount to West Texas Intermediate because export pipelines are usually too full to accept all the oil that producers want to ship. That discount can be steep at times -- $20 a barrel or more -- and is currently more than $10.The situation could get worse if Biden wins the Nov. 3 election and makes good on his promise to rescind the permit granted by President Donald Trump for the development of Keystone XL, the biggest of three major Canadian export pipelines under construction.By acquiring Husky’s refineries in Ohio and Wisconsin, Cenovus will reduce its exposure to that problem. The merged company will be able to refine as much as 70% of its crude directly in the U.S. Midwest, the biggest market for Canadian crude, meaning the company won’t have to sell as much oil locally at depressed prices.“Our firm view is that Keystone is not going to be built,” Jeffrey Craig, an analyst at Toronto-based Veritas Investment Research Corp., said of the proposed 830,000-barrel-a-day line from Alberta to Nebraska. Access to Husky’s heavy-oil refineries is “probably the biggest reason to do this deal,” he said.Investors did not react positively Monday, with Cenovus shares falling nearly 15% at one point. They were down more than 8% to C$4.47 as of 1:46 p.m. in Toronto. Husky shares rose 13% to C$3.57. The acquisition will make Cenovus more like rivals Suncor Energy Inc. and Imperial Oil Ltd., which have larger refining businesses and are therefore less exposed to pipeline risk.As concern about climate change has increased, Canada’s oil sands companies have faced criticism about the carbon emissions produced from mines and steam-injected wells in northern Alberta. In alliance with some indigenous groups, environmentalists have gone to court to stop pipelines and, more recently, appealed directly to banks not to fund projects.The region’s carbon footprint has become an issue for investment firms that are growing more concerned with the environmental and social risks taken by the companies they own. Norway’s massive wealth fund, for example, cut its holdings of Canadian oil sands stocks, including Cenovus and Suncor.For ESG data on Cenovus, click hereEnvironmentalists’ efforts have partly paid off. Keystone XL’s future remains in doubt 12 years after it was first proposed by TC Energy Corp. The Trans Mountain pipeline expansion to Vancouver and Enbridge Inc.’s Line 3 are under construction, but only after years of delays that brought new oil sands development to a near halt.For Cenovus, the Husky deal means that pipeline risk “has been materially decreased,” Chief Executive Officer Alex Pourbaix said on a conference call Sunday. “I’ve been talking to investors for three years, telling people I was optimistic the pipes were going to come.”Two years ago, Alberta’s government was forced to impose output limits on producers when oil sands production overwhelmed pipeline capacity, causing a glut of crude to form in Western Canada that temporarily depressed local prices to discounts as large as $50 a barrel.Those limits are due to be lifted in December after the collapse in oil demand caused by the Covid-19 pandemic prompted the industry to shut in some production.(Updates with share price reaction in seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
NEW YORK, Oct. 26, 2020 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, has launched an investigation into whether the board members of Husky Energy, Inc. (Other OTC: HUSKF) breached their fiduciary duties or violated the federal securities laws in connection with the company’s merger with Cenovus Energy Inc. (NYSE: CVE). Click here to learn more and participate in the action.On October 25, 2020, Husky Energy announced that it had signed an agreement to be acquired by Cenovus for approximately $3.8 billion. Pursuant to the merger agreement, Husky Energy stockholders will receive 0.7845 shares of Cenovus common stock and 0.0651 shares of a Cenovus purchase warrant for each share of Husky Energy common stock owned. The deal is expected to close in the first quarter of 2021.Bragar Eagel & Squire is concerned that Husky Energy’s board of directors oversaw an unfair process and ultimately agreed to an inadequate merger agreement. Accordingly, the firm is investigating all relevant aspects of the deal and is committed to securing the best result possible for Husky Energy’s stockholders.If you own shares of Husky Energy and are concerned about the proposed merger, or you are interested in learning more about the investigation or your legal rights and remedies, please contact Melissa Fortunato or Alexandra Raymond by email at firstname.lastname@example.org or telephone at (646) 860-9157, or by filling out this contact form. There is no cost or obligation to you.About Bragar Eagel & Squire, P.C.: Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.Contact Information: Bragar Eagel & Squire, P.C. Melissa Fortunato, Esq. Alexandra Raymond, Esq. email@example.com www.bespc.com