Husky Energy Sells To Cenovus For $2.9 Billion
One of the Northland's largest employers has been sold. Husky Energy is being sold to Cenovus Energy in an all-stock deal that's estimated to reach $2.9 billion. The announcement came earlier this week as energy companies globally look for ways to consolidate their business under the existing pandemic-driven conditions that have generally weakened the price of oil.
The sale shores up Cenovus Energy for continued growth in the future. According to news sources, Alex Pourbaix - the Chief Executive Officer for the company shared that "[t]he diverse portfolio will enable [Conovus Energy] to deliver stable cash flow through price cycles". The sale has already been unanimously approved by the boards of directors of both companies and is expected to be finalized at some time during the first quarter of 2021.
Even as shares of both companies have been down this year, the deal should prove to be profitable for all involved:
"Husky shareholders will receive 0.7845 of a Cenovus Energy share and 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share.
Husky's market value stood at C$3.2 billion as of [the close on October 23, 2020] which implies Cenovus is offering a 19.5% premium through the all stock deal."
After the close of the deal, shareholders of Cenovus would come out in the positive in the deal. The value of their remaining shares would see a Cenovus shareholder owning 61% of the combined entity.
The sale comes as Husky Energy rebuilds its refinery in Superior - following the April 2018 explosion. The plant is currently under a $750 million work order that's cleaning up and rebuilding the damage left from that explosion that rocked the Northland.