The Successful Investor Hotline – Friday, February 27, 2009

Article Excerpt

NOVA CHEMICALS CORP., $7.03, Toronto symbol NCX, has accepted a friendly takeover offer from International Petroleum Investment Co., which is owned by the government of Abu Dhabi (Abu Dhabi is the capital city of the United Arab Emirates.) Nova shareholders will get $6.00 U.S. a share in cash, or 359.9% more than Nova’s closing price of $1.66 (Canadian) on Friday, February 20, 2009, the last trading day before the takeover was announced. Two-thirds of Nova’s shareholders, and Canadian and U.S. competition regulators, need to approve the deal. The plastics and chemicals company should have little trouble getting these approvals. The slowing economy has hurt demand for Nova’s industrial plastics, and it was dangerously close to breaching the covenants of its lending agreements earlier this month. If Nova didn’t agree to the takeover, its lenders could have demanded that it repay all of its loans immediately. Nova’s total debt at the end of 2008 was $1.7 billion (all amounts except share…