The Ontario Securities Commission is asked to halt Cenovus Energy’s (CVE -0.5%) planned C$17.7B purchase of ConocoPhillips’ (COP +0.6%) Canadian assets pending a shareholder vote, Financial Post reports.
Coerente Capital Management, which controls 524K CVE shares for its clients, says the Toronto Stock Exchange "should not have allowed the transaction without a shareholder vote, and we are now requesting that the [OSC] intervene, stop the transaction from being completed due to its size, materiality and in the best interest of the capital markets."
When CVE announced in March its deal for COP's oil sands and natural gas assets in Canada, it said it would issue 208M shares to COP to pay for part of the deal and announced a bought-deal of 187.5M shares; Coerente argues the two equity issuances represent 24.97% and 22.51% of CVE's outstanding shares and, taken together, exceed TSX rules that give shareholders the right to vote on transactions where companies dilute their float by more than 25%.
CVE says shareholder approval is not required for an asset purchase or for equity financing.
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