Topic: How To Invest

The Successful Investor Hotline – Friday, February 12, 2021

Article Excerpt

CENOVUS ENERGY INC., $8.57, 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 during the five years following the merger’s completion. Cenovus shareholders now own 61% of the combined company, with Husky shareholders holding the other 39%. Due to the cancellation of the Keystone XL pipeline by U.S. president Joe Biden, Cenovus booked a $100 million non-cash…

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