Cnooc to use cash, financing to buy Nexen shares for $15.1 billion

By Lisa Kerner

Charlotte, N.C., July 23 - Cnooc Ltd. announced it will use existing cash resources and external financing to acquire all of the outstanding common shares of Nexen Inc. for $27.50 per share in cash, or about $15.1 billion.

Executives did not specify the form of external financing during a conference call on Monday.

Nexen's current debt of about $4.3 billion will remain outstanding.

Also, Cnooc will pay C$26.00 per share in cash plus any accrued dividends to holders of Nexen preferred shares in a separate class vote.

Closing of the transaction is not conditioned on approval by the holders of the Nexen preferred shares, according to a Cnooc news release.

The boards of directors of both companies have approved the transaction.

Cnooc will pay a $425 million termination fee to Nexen should the transaction not close due to regulatory reasons in China.

By acquiring Nexen, Cnooc will establish Calgary, Alta., as its North and Central American headquarters and manage Nexen's global operations.

The transaction, which will be completed by way of a plan of arrangement, is expected to close in the fourth quarter of 2012.

The purchase price represents a premium of 61% to the closing price of Nexen's common shares on Friday.

Cnooc is a Hong Kong-based oil and gas exploration and production company.

Nexen is an energy company based in Calgary.

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