Quick Stats

Quick Stats

    You are here

    Husky Future Uncertain

    Chief Executive says the Canadian chain is in talks to sell assets or expand through acquisition.

    CALGARY, Alberta

    Husky Energy Inc., Canada's fifth-largest integrated oil firm, has been in talks with more than one company about either being acquired or making an acquisition, but the process has been delayed by market uncertainty after the attacks on the United States, Husky's chief executive said yesterday.

    Husky, which is majority-owned by Hong Kong billionaire Li Ka-shing, has been the subject of rampant takeover speculation since early September. Later that month it conceded it was in talks about a "potential transaction" but gave no details.

    "We've had quite constructive preliminary discussions regarding possible transactions, [but] in view of Sept. 11...Husky's not in a hurry at the moment," Husky CEO John Lau told Reuters. Speaking publicly on the matter for the first time since the speculation began, Lau confirmed Husky was in talks with more than one company on different potential deals but declined to name the parties or say when a transaction might be struck.

    Historically a private company, Husky went public in fall 2000 after it acquired Renaissance Energy for roughly $2.7 billion. While the deal boosted Husky's upstream assets, the company also manages 550 Husky and Mohawk convenience stores and about 50 travel centers. The company ranks 21 in the Convenience Store News Top 50 report.

    A deal involving Husky would be the latest in an intense round of consolidation in Canada's oil industry, with most transactions involving U.S.-based buyers. In September, Devon Energy Corp. initiated a $3 billion takeover of Toronto gas producer Anderson Exploration. Earlier in the summer, Conoco Inc. bought Gulf Canada for $4 billion.

    Firms speculated to be in discussions with Husky include TotalFinaElf of France, Canadian Natural Resources Ltd. and PanCanadian Energy Corp.

    Lau said Burlington Resources Inc.'s $2.1-billion bid for Canadian Hunter Exploration, announced on Tuesday, had removed some of the market's anticipation from any deals Husky might strike. "I feel we have breathing space. We want to see the market, the oil price and the trend," he said. Asked if any deal was being delayed over a question of price, he said, "It is a question of how to create shareholder value."

    Husky currently has a market value of about $5 billion. Its operations include oil and gas production in western Canada, exploration off the East Coast and in the South China Sea in addition to its western Canadian refining and convenience store assets.

    • About

    Related Content

    Related Content