Gibson Energy Surges Most Since January on Takeover Report
Gibson Energy Inc. rose the most since January following a report that the Canadian operator of pipelines and oil terminals turned down a C$2.8 billion ($2.2 billion) takeover offer.
The shares rose 5.9 percent to C$16.97 at 1:45 p.m. in Toronto after gaining as much as 9.1 percent earlier, the most since Jan. 21. The stock is up 23 percent this year.
Gibson’s board of directors unanimously rejected a July 4 offer from a Singapore-based fund that represented a 39 percent premium to Gibson’s price at the time, the Financial Post reported Wednesday, citing a letter from Chairman James Estey. The offer of C$19.94 per share was “inadequate” and not in the best interest of Gibson, the newspaper wrote, citing the letter.
Gibson confirmed it received a “non-binding, highly conditional proposal for discussion, from an unknown, unidentifiable foreign entity whose principals insisted on anonymity,” the company said Thursday in a statement. The board considered the proposal, hired advisers and concluded that the offer provided “inadequate value to shareholders.”
Gibson, which owns pipelines and an oilfield trucking business among its range of petroleum industry services, has been looking to sell its industrial propane business as part of an effort to “simplify” and “focus investment capital on our highest risk-adjusted return growth projects,” Chief Executive Officer Stew Hanlon said in an Aug. 2 statement. The company reported a loss of C$134 million in the second quarter compared with a loss of C$6.7 million in the year-earlier period.
“We expect continued momentum for the stock amid heightened speculation surrounding the ultimate price tag for the industrial propane business, unsecured infrastructure growth opportunities, and now private equity take-out potential,” Patrick Kenny, an analyst at National Bank Financial in Calgary, wrote in a note to clients Thursday.
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