The Successful Investor Hotline – Friday, March 27, 2009

Article Excerpt

PETRO-CANADA, $34.68, Toronto symbol PCA, jumped 17% this week after it accepted a friendly takeover offer from Suncor Energy Inc. ($29.36, Toronto symbol SU). (Suncor is not related to Philadelphia-based refiner Sunoco Inc., New York symbol SUN.) Under the terms of the deal, Petro-Canada shareholders will get 1.28 common shares of Suncor for each share they own, while Suncor investors will get one share of the new company for each Suncor share they own. Suncor shareholders will own 60% of the combined company, which will be Canada’s largest oil company in terms of market cap. Petro-Canada shareholders will own the remaining 40%. The combined company will operate under the Suncor name. However, the new company will keep using the Petro-Canada banner for its retail gas stations (Petro-Canada has 1,300 stations, while Suncor has roughly 300 that operate under the “Sunoco” banner). It will have proven oil reserves of 3.1 billion barrels, compared to 2.3 billion barrels for Imperial Oil (see below). Based on…

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