Total increases offer to acquire UTS Energy
Total E&P Canada Ltd. has increased its offer to $1.75 (Can.)/share cash to acquire all outstanding common shares of UTS Energy Corp.
By OGJ editors
HOUSTON, Apr. 17 -- Total E&P Canada Ltd. has increased its offer to $1.75 (Can.)/share cash to acquire all outstanding common shares of UTS Energy Corp. This is up from $1.30 (Can.)/share.
On Mar. 27, the UTS board reiterated its unanimous recommendation that shareholders reject Total's unsolicited bid to acquire UTS as being financially inadequate. In January Total offered $617 million in cash for UTS (OGJ Online, Jan. 28, 2009).
Since Total launched its bid, UTS has reported a number of positive developments, further underscoring the inadequate price Total is offering:
-- UTS announced a major increase in its contingent bitumen resources.
-- The Fort Hills partnership and the Alberta government announced that the term of the Fort Hills leases has been extended until 2019.
-- The Fort Hills partnership initiated a cost review that UTS expects will result in substantial capital and operating cost savings.
-- The Fort Hills project should greatly benefit from the proposed Suncor and Petro-Canada merger. The merged company would be the preeminent and most experienced oil sands mining operator.
-- UTS announced that 49 of 59 core holes drilled in the Lease 421 area have encountered oil sands, representing a significant discovery.
-- The price of oil has increased by nearly 30%.