CALGARY — Nexen Inc. shares jumped by nearly a third Tuesday after a report said that French oil major Total SA is poised to make a $19.7-billion takeover offer for Canada's fourth biggest independent oil explorer.
The Financial Times reported on its website that Total's board of directors was meeting to approve a $38-a-share offer for Nexen.
Nexen shares, which have gyrated in recent weeks on rumours that Total was mulling a bid, rose $5.12 to $26.97 in heavy volume of 20.2 million shares by midafternoon Tuesday on the Toronto Stock Exchange. Earlier the shares touched $29.10
The report said Total has secured financing of €7.5-billion ($11.86-billion) from five European banks and that a bid could be launched as early as this week.
Total, which has made two acquisitions in Canada over the past three years, declined to comment on the report.
Nexen issued a statement Tuesday at the request of the Toronto Stock Exchange, saying was not aware of any corporate developments to account for the activity in its stock and its policy is not to comment on rumours and speculation.
The company's chief executive said in October that Nexen could put itself up for auction if it becomes the target of an unsolicited takeover bid.
Nexen operates in Canada, the Gulf of Mexico, the North Sea, Yemen and elsewhere. It also recently opened its $6.1-billion Long Lake oil sands project in northern Alberta.
The company also holds a small stake in Syncrude Canada Ltd, the world's largest oil sands producer.
Total moved earlier this year to increase its stake in the oil sands, which contain the largest oil reserves outside the Middle East, paying $530.5-million for Synenco Energy Inc., which owned 60 pe rcent of the 1.66 billion barrel Northern Lights project.
Total is also planning a $9-billion oil sands project at the Joslyn property in northern Alberta, acquired when it bought Deer Creek Energy Ltd. for $1.6-billion in 2005.
Investors have stepped up their interest through Nexen options, which have been heavy on the call side.