Globe & Mail Reports Encana is Ripe for a Takeover!Personally, I don't have a problem with a takeover as long as there is an offer worth at least $12.00 a share.
The Globe and Mail reports in its Wednesday, July 29, edition that EnCana and Baytex Energy appear vulnerable to a takeover. The Globe's Jeffrey Jones writes that EnCana is worth about a third of what it was a year ago. EnCana spent $9-billion (U.S.) on United States oil acquisitions last year, a figure that is now nearly $3-billion (U.S.) more than the entire company's market capitalization. Baytex Energy was another U.S. shale acquirer in 2014, buying Aurora Oil & Gas and its Texas acreage for $1.8-billion (Canadian), $2.5-billion (Canadian) including assumed debt. Baytex's market cap was $2.4-billion (Canadian) on Tuesday. With a second oil-price dip in the works, reserve writedowns are set to pick up the pace. With the loonie getting pummelled, institutional investors have rushed for the exits. Retail investors are hard on their heels. EnCana, Baytex and numerous others are looking more vulnerable than ever to takeover, based on their extensive operations in desirable energy neighbourhoods and shrunken share values. Mr. Jones says the likely acquirers are Imperial Oil, Canadian Natural Resources, Husky Energy and Suncor Energy. He says they have the means, if not the motive, for a big deal.