Topic: How To Invest

The Successful Investor Hotline – Friday, October 30, 2020

Article Excerpt

CENOVUS ENERGY INC., $4.36, Toronto symbol CVE, remains a buy for patient investors. The company has agreed to acquire rival oil producer Husky Energy Inc. (Toronto symbol HSE) in a friendly, all-stock takeover. The combined firm will be Canada’s third-largest producer of oil and natural gas with output of about 750,000 barrels of oil equivalent a day. It will also be the country’s second-largest refiner, with a total capacity of 660,000 barrels a day. Under the terms of the deal, Husky investors will receive 0.7845 of a Cenovus share for each share they hold. They will also get 0.0651 of a Cenovus share 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 will own 61% of the combined company, with Husky shareholders holding the other 39%. The merger will let Cenovus save $600 million a year by eliminating overlapping operations, including cutting 25% of the…