Canadian 88 drops sale process, but Canadian Superior offer still open

Canadian 88 Energy Corp., Calgary, has decided to remain independent and has dropped a sale process started last year, prompting Canadian Superior Energy Inc., Calgary, to say its merger offer remains open to Canadian 88 shareholder approval. Canadian Superior's proposal will be reviewed by Canadian 88 shareholders at a special meeting in July.


By the OGJ Online Staff

HOUSTON, June 13 -- Canadian 88 Energy Corp., Calgary, has decided to remain independent and has dropped a sale process started last year, prompting Canadian Superior Energy Inc., Calgary, to say its merger offer remains open to Canadian 88 shareholder approval.

Canadian 88 Pres. and CEO Joseph Pritchett told analysts in a conference call Tuesday, "We had serious interest from a number of prominent industry players. They were not willing to pay for the upside that I and the board believe exist."

Canadian Superior Energy made an unsolicited $700 million (Can.) bid for a merger with Canadian 88 in April (OGJ Online, Apr. 27, 2001.)

Richard Watkins, Canadian Superior's vice-president of corporate development, issued a news release Tuesday saying, "Unfortunately for Canadian 88 shareholders, in Canadian Superior's opinion, no real go forward strategy exists."

Canadian 88 announced a sales process to maximize shareholder value on Oct. 10, with the support of its largest shareholder, Duke Energy Corp.

Canadian Superior has proposed changing the Canadian 88 board and exchanging 2.75 shares of Canadian Superior for each share of Canadian 88.

Canadian 88's board rejected the merger proposal, saying the offer did not offer enhanced liquidity or incremental value for Canadian 88 shareholders. But Canadian Superior's proposal will be reviewed by Canadian 88 shareholders at a special meeting in July.

Watkins said, "The only viable alternative available to shareholders is Canadian Superior's merger proposal, given that the status quo is clearly not acceptable. Canadian 88 has an excellent asset base, which is being undermanaged. We strongly believe that Canadian Superior can realize substantially better value and performance for all shareholders."

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