Abu Dhabi firm bids for Primewest
( Reuters ) - Abu Dhabi National Energy Co will buy Canada's Primewest Energy Trust for C$5 billion in cash, Primewest said on Monday, as the state-controlled firm makes good on plans to turn its new Canadian unit into a major oil producer.
In its biggest acquisition to date, Abu Dhabi National Energy, better known as Taqa, is offering C$26.75 per Primewest unit, a 30 percent premium to the units' closing price on Friday.
"It's a pretty big value that's being paid," said William Lacey, an analyst at FirstEnergy Capital Corp in Calgary. Taqa "doesn't seem to be short on cash".
The acquisition is Taqa's third in Canada this year, and more than fulfills a pledge Chief Executive Peter Barker Homek made last month to spend $3 billion over 12 months boosting the output of its newly formed Canadian unit, Taqa North, to 100,000 barrels a day.
The company entered the Canadian oil market in May, when it announced the $2 billion purchase of Pogo Producing Co's Canadian unit. Last month it agreed to buy the Canadian assets of Pioneer Natural Resources Co for $540 million.
Taqa, 75-percent owned by the Abu Dhabi government, plans to quadruple its assets to $60 billion in five years as the Gulf state looks to use its oil revenue to diversify its holdings.
"This acquisition is a major leap forward for Taqa globally, and an important step toward the achievement of our strategy to grow to C$20 billion in Canadian assets," Barker Homek said in a statement. "We believe that the PrimeWest assets are an excellent fit with our business objectives."
Taqa said last month that it planned to expand its Canadian operations, in part through acquisition of firms in the battered income-trust sector.