An article today reports Total has given up on its bid for Canadian Oil Sands participant UTS after Total fell short of acquiring two-thirds of the outstanding UTS stock by its Monday evening deadline. I find this an interesting development, and one that suggests UTS shareholder confidence in the future of both UTS and arguably Canadian Oil Sands projects generally.

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Following from my post yesterday on the Total bid for UTS, the CEO of the largest UTS shareholder has said there’s no way he’ll support Total SA’s takeover bid “because it’s too low and doesn’t ascribe any value to the company’s share of the oil at the Fort Hills project in Alberta” – see full story here.

I suspect, as posted yesterday, that this is just the first of a flurry of comments and activity with respect to Total’s bid.  I consider the outcome of this bid process important and will continue to add posts under a new Blog Category ‘Total/UTS’ – stay tuned.

The views expressed in this Post are those of the author. They are offered to readers for information and general guidance only. They are neither intended to, nor should be taken to, constitute economic or investment advice. No check of data underlying articles or comments referenced herein has been made, and no responsibility is taken for them.  See Legal Disclaimer.

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Only 4 days ago I posted on this Blog about development of the Canadian Oil Sands retracting in light of the current oil price – read that post here.  Late yesterday the French company, Total made an unsolicited bid of C$1.30 per share - a 57% premium to yesterday’s closing price.  As recently as last July UTS’s share price was C$6.00 (a market capitalization of approximately C$3 billion).  At yesterday’s close UTS’s market capitalization was just under C$400 million.  Total’s offer expressed in market capitalization is just over C$600 million.  You can read about this bid in an Oilweek write-up here, a Reuter’s write-up here, and on the UTS website here.  You can access systematically organized UTS trading, corporate and financial data by visiting the UTS website here, clicking on any page under the ‘Investors’ tab, and clicking on the gold ‘button link’ to StockResearchPortal.com you will find there.

It is virtually certain that a large number of UTS shareholders will lose significant amounts of their invested capital if Total’s bid succeeds.  I consider it very important to follow this story closely as it unfolds.  Largely, this is because I am convinced that in this market an increasing number of mining and oil & gas companies with good long-term assets will be targeted by unsolicited and hostile bids.  If I prove to be correct there will be a lot of very unhappy Institutional and Retail shareholders who are prepared to wait for good assets to be more appropriately valued by the markets.

I will post regularly on this Blog as the Total/UTS story develops – stay tuned.

The views expressed in this Post are those of the author. They are offered to readers for information and general guidance only. They are neither intended to, nor should be taken to, constitute economic or investment advice. No check of data underlying articles or comments referenced herein has been made, and no responsibility is taken for them.  See Legal Disclaimer.

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