* Shareholders to get $27.50 in cash per Nexen share
* Company says Kevin Reinhart will remain Nexen's CEO
* Nexen shares close at $27.41 on the NYSE
By Euan Rocha
TORONTO, Feb 25 The contentious $15.1 billion
takeover of Canadian oil and gas company Nexen Inc by
Chinese state-owned entity CNOOC Ltd closed on Monday,
more than seven months after China's largest-ever foreign
takeover was announced.
Nexen, based in Calgary, Alberta, said in a statement on
Monday that the deal had closed and its shareholders would
receive $27.50 in cash for each Nexen share.
Nexen said its common and preferred shares would be delisted
from the Toronto Stock Exchange in a few days, while its common
shares were expected to cease trading on the New York Stock
Exchange prior to the market opening on Feb. 26.
The company said Kevin Reinhart would remain chief executive
of Nexen, which will operate as a wholly owned subsidiary of
Nexen also said it would have a new board chaired by Li
Fanrong, who is CEO of CNOOC. Other members of the new Nexen
board will be Reinhart, Fang Zhi, Barry Jackson, Thomas O'Neill
and William Berry.
The takeover, originally announced in July, won approval
from Canadian regulators in December. Earlier this month, CNOOC
overcame its last major hurdle after the deal was cleared by the
Committee on Foreign Investment in the United States, which had
a say because of Nexen's exploration and production assets in
the Gulf of Mexico.
The two companies have not disclosed what conditions were
imposed by Canadian and U.S. regulators for the deal to win
approval, but one of CNOOC's advisers said the parameters around
the assurances were largely in line with expectations.
"The level of detail that was negotiated and the time-frames
of those commitments, that was a bit of a surprise though," said
Dan Barclay, who heads BMO Capital Markets' Canadian M&A group,
which acted as one of CNOOC's financial advisors on the deal.
"What they (CNOOC) had signed up for in the beginning, they
got in the end, only it was a bit more rigorous than where we
had started," said Barclay.
The Nexen acquisition gives CNOOC new offshore production in
the North Sea, the Gulf of Mexico and off western Africa, as
well as producing properties in the Middle East and Canada.
In Canada, CNOOC gains control of Nexen's Long Lake oil
sands project in the oil-rich province of Alberta, as well as
billions of barrels of reserves in the world's third-largest
crude storehouse - the oil sands in the province of Alberta.
Barclay said the approval process in Canada took roughly as
long as the companies expected, while the process in the United
States took longer.
Canada approved the takeover even though some members of the
governing Conservative Party had misgivings about it. But the
government said the CNOOC-Nexen was the last deal of its kind
that it would approve, drawing a line in the sand against
state-controlled companies taking any further majority stakes in
the oil sands.
U.S. approvals dragged on as legislators examined whether
the deal would threaten U.S. national security. A few years ago
the United States, which has traditionally been more wary than
Canada of Chinese investment, thwarted CNOOC's $18.5 billion bid
for Unocal due to national security concerns.
The closing, on Monday, comes just as Nexen reported a net
loss in its final full quarter as a reporting Canadian company.
It said extended weakness in North American natural gas markets
forced it to book a multi-million dollar asset impairment
Nexen reported a fourth-quarter loss of C$6 million ($5.9
million), or 2 Canadian cents a share, compared with a year-ago
profit of C$43 million, or 8 Canadian cents a share. Nexen said
a combination of lower estimated future gas prices and revisions
to oilfield abandonment costs prompted a C$237 million non-cash
impairment charge in the recent quarter.
Nexen's U.S.-listed shares closed at $27.41 on the New York
Stock Exchange on Monday.