Cenovus agreed to acquire Athabasca Oil in a cash-and-share transaction with an implied enterprise value of C$5.7 billion. The acquisition would add a neighbouring thermal oil producer to its Canadian oil sands operations. Shareholders can choose cash or shares, subject to a cash cap. Completion remains conditional on shareholder and regulatory approvals, with closing expected in December.
Cenovus agreed to acquire Athabasca Oil Corporation in a transaction with an implied enterprise value of about 5.7 billion Canadian dollars. The cash-and-share agreement would add a neighbouring producer to its Canadian oil sands business. Cenovus estimates Athabasca’s year-end production at about 45,000 barrels of oil equivalent a day. The companies’ boards unanimously support the agreement.[1], [2]
Athabasca shareholders can elect 12 Canadian dollars in cash, Cenovus shares, or a combination for each share they own. Their elections are subject to allocation limits: total cash cannot exceed 4.3 billion Canadian dollars. Cenovus expects the final payment to comprise 65–75 per cent cash and 25–35 per cent shares. It intends to fund the cash portion from existing cash and short-term borrowing.[1]
The companies expect the transaction to close in December, subject to Athabasca shareholder and regulatory approvals. Cenovus has retained its 4 billion Canadian dollar net-debt target, although it projects a higher balance immediately after the acquisition. Management also anticipates around 85 million Canadian dollars in annual synergies, most targeted for the first full year. These are company forecasts attached to an agreement that has not yet closed.[1]
