Topic: How To Invest

The Successful Investor Hotline – Friday, April 9, 2021

Article Excerpt

CENOVUS ENERGY INC., $9.51, Toronto symbol CVE, remains a buy for long-term gains. On January 1, 2021, the company completed its acquisition of rival oil producer Husky Energy Inc. (Toronto symbol HSE) in a friendly all-stock takeover. The combined firm is now Canada’s third-largest producer of oil and natural gas, with output of about 750,000 barrels of oil equivalent per day. It’s also the country’s second-largest refiner, with a total capacity of 660,000 barrels a day. Under the terms of the deal, Husky investors received 0.7845 of a Cenovus share for each share they held. They also got 0.0651 of a Cenovus purchase warrant; each whole warrant will entitle the holder to buy one Cenovus common share for $6.54 a share at any point during the five years following the merger. Cenovus shareholders now own 61% of the combined company, with Husky shareholders holding the other 39%. Before the merger, Husky planned to sell its chain of roughly 500 retail gas stations. Cenovus now plans…