Duvernay Oil Agrees to Takeover Bid from Shell Canada

Investors can expect a big jump in Duvernay Oil Corp. (DVNLF.PK) shares after the company agreed to a takeover bid from Shell Canada Limited worth C$5.9-billion on Monday morning.

Under the offer, shareholders of Duvernay will receive C$83 per share in cash, representing a 42% premium over Friday's closing price of C$58.44 - not bad for a day's work.

And for those investors who held shares in Duvernay since the beginning of the year, it gets even better. Their total return so far this year based on Duvernay's closing price of C$29.04 on Dec. 31, 2007, is a whopping 185% assuming the deal goes through.

Comments

[Steven Ward:]

Increasingly, buyouts will occur for Canadian companies that have their assets in one bucket, that is one country, ruled by law with a respect for property rights.This l;eaves out the Talisman's and Nexen's as their properties are widely scattered and to sell off the foreign assets to time consuming.
Other possible buyouts of the one bucket company are Crescent Point Energy Trust, like Duvernay, a rising production profile and long lived assets as well as Tri star Oil and Gas.

Now the premiums are starting to bite and are in larger dollar amounts with significant upside to the last quote before the buyout offer. It appears some majors, such as Shell, are believing the high prices are here to stay. The others will follow and the investor in the independent oil and gas company will finally reap the rewards of higher buyout prices, finally.

2008 Jul 15 10:14 PM