CVE
Cenovus to buy Husky Energy in $2.9B stock deal
- Cenovus Energy (NYSE:CVE)agrees to acquire Husky Energy(OTCPK:HUSKF)
in an all-stock transaction, creating an integrated Canadian oil and
natural gas company that's expected to boost free funds flow generation.
- Combined company will have about 750K boe/d production, making it the
third-largest Canadian oil and natural gas producer. It will be the
second-largest Canadian-based refiner and upgrader with total North
American upgrading and refining capacity of ~660K boe/d.
- The aggregate consideration for Husky shareholders implies a
transaction equity value for Husky of ~C$3.8B (US$2.9B) and a transaction
enterprise value for Husky of ~C$10.2B.
- Husky shareholders to get 0.7845 of a Cenovus share plus 0.0651 of a
Cenovus share purchase warrant in exchange for each Husky common share;
represents a 21% premium, excluding warrants, relative to Husky's
five-day
volume-weighted average price per share as at Oct. 23, 2020.
- Expects to generate incremental C$1.2B of annual free funds flow,
comprised of C$600M in annual corporate and operating synergies and
C$600M
in annual capital allocation synergies within the first year.
- The combined company is expected to be free funds flow breakeven in
2021 at WTI prices of US$36/bbl, with a line of sight to reducing its
free
funds flow breakeven to less than WTI US$33/bbl by 2023.
- Anticipates quarterly dividend of C$0.0175 per share upon board
approval.
- Immediately following the close of the transaction, Hutchison Whampoa
Europe Investments S.à r.l. and L.F. Investments S.à r.l. will
respectively
hold ~15.7% and ~11.5% of the combined company; the two firms have also
entered into separate standstill agreements with Cenovus.
- The transaction is expected to close in Q1 2021.
- Conference call at 1:00 PM ET.
- See Cenovus and Husky's levered free cash flow since 2016:
|Today, 12:13 PM|4 Comments
Cenovus to buy Husky Energy in $2.9B stock deal
- Cenovus Energy (NYSE:CVE)agrees to acquire Husky Energy(OTCPK:HUSKF)
in an all-stock transaction, creating an integrated Canadian oil and
natural gas company that's expected to boost free funds flow generation.
- Combined company will have about 750K boe/d production, making it the
third-largest Canadian oil and natural gas producer. It will be the
second-largest Canadian-based refiner and upgrader with total North
American upgrading and refining capacity of ~660K boe/d.
- The aggregate consideration for Husky shareholders implies a
transaction equity value for Husky of ~C$3.8B (US$2.9B) and a transaction
enterprise value for Husky of ~C$10.2B.
- Husky shareholders to get 0.7845 of a Cenovus share plus 0.0651 of a
Cenovus share purchase warrant in exchange for each Husky common share;
represents a 21% premium, excluding warrants, relative to Husky's
five-day
volume-weighted average price per share as at Oct. 23, 2020.
- Expects to generate incremental C$1.2B of annual free funds flow,
comprised of C$600M in annual corporate and operating synergies and
C$600M
in annual capital allocation synergies within the first year.
- The combined company is expected to be free funds flow breakeven in
2021 at WTI prices of US$36/bbl, with a line of sight to reducing its
free
funds flow breakeven to less than WTI US$33/bbl by 2023.
- Anticipates quarterly dividend of C$0.0175 per share upon board
approval.
- Immediately following the close of the transaction, Hutchison Whampoa
Europe Investments S.à r.l. and L.F. Investments S.à r.l. will
respectively
hold ~15.7% and ~11.5% of the combined company; the two firms have also
entered into separate standstill agreements with Cenovus.
- The transaction is expected to close in Q1 2021.
- Conference call at 1:00 PM ET.
- See Cenovus and Husky's levered free cash flow since 2016:
|Today, 12:13 PM|4 Comments
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