Looking for a strategic asset to move Canadian liquefied natural gas to Asia, Petroliam Nasional Bhdor Petronas, as Malaysia's state-owned oil and gas firm is knownhas agreed to buy Progress Energy Resources Corp. of Calgary for $5.5 billion. Asian buyers have been lured by low Canadian natural gas prices, and this transaction gives Petronas excellent proven reserves: ownership of three Progress Energy fields in which it had already invested in 2011, and ownership of the largest player in the Montney shale-gas operation in British Columbia.
Petronas offered $20.09 a share, a 77 percent premium over Progress's close before the deal. Analysts said that the price is an excellent value for Progress shareholders and will provide the Canadian firm with the financial scale it needs to expand its access to the lucrative Asian markets. Petronas has a lot of experience at the global level in developing liquefied natural gas production. The companies have isolated a potential site for a liquefied natural gas export terminal in Prince Rupert, British Columbia, and feasibility studies are expected to start soon. At press time Progress's shareholders were scheduled to vote on the bid on August 28.
For acquiror Petroliam Nasional Bhd (Kuala Lumpur)
Energy: Chrysten Perry. Securities: Michael Bennett and Kevin Johnson. Tax: Darren Heuppelsheuser. Competition/Foreign investment: John Carleton. Energy: associate Robert Froehlich. (They are in Calgary.)
For target Progress Energy Resources Corp. (Calgary)
Burnet, Duckworth & Palmer:
Energy: John Cuthbertson. Investment Canada and competition: Jody Wivcharuk. Securities: Gary Bugeaud, Shannon Gangl, Alyson Goldman, and associate Lindsay Cox. Tax: John Brussa and associate Heather DiGregorio. (They are in Calgary.)
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Quebec-based Alimentation Couche-Tard Inc., a powerhouse in the Canadian convenience store field, looked to Europe in June to sate its acquisition appetite, winning a long battle to acquire Norway's Statoil Fuel & Retail ASA chain for $2.16 billion. Statoil is the largest fuel and convenience store chain in Scandinavia, and the deal has already triggered speculation that Couche-Tard may be looking for another deal to extend its reach into Germany.
The transaction gives Couche-Tard 2,300 Statoil outlets across Norway, Finland, Sweden, Poland, and Russia, and will immediately add more than $500 million to its EBITDA.
Couche-Tard offered $8.54 per share in the all-cash offer, a 53 percent premium over the predeal value of the shares. Parent company Statoil ASA agreed to sell its majority 54 percent stake in Statoil Fuel & Retail, and since then Couche-Tard has been working to secure minority shareholders.
In addition to Couche-Tard stores in Quebec, the company also owns Mac's convenience stores throughout Canadaa total of about 2,000 retail outlets. It also owns 3,500 Circle K convenience stations in the United States.
The deal is expected to close in November. It is the largest acquisition in Couche-Tard's history and its first outside of North America.
For acquiror Alimentation Couche-Tard Inc. (Laval, Quebec)
Senior directorlegal affairs and corporate secretary Sylvain Aubry. (He is in Laval, Quebec.)
Davies Ward Phillips & Vineberg:
Corporate and banking: Sébastien Thériault and associate Véronique Gaumond-Carignan. Capital markets: Olivier Désilets, Gerald Shepherd, Scott Tayne, and associate Christine Lenis. Corporate: Liliana Korosi. (All are in Montreal except for Shepherd and Tayne, who are in New York.) Davies has represented Couche-Tard in all of its major transactions since the company's IPO in 1986.
Corporate: Kjetil Hardeng and Bjørn Olav Torpp. Securities: Amund Fougner Bugge. Banking/Finance: Trond Kildal. (They are in Oslo.)
Antitrust: Suzanne Carter, Stephen Rose, and associate Georgina Lake. Corporate: Robin Johnson and associate Richard Kyle. (All are in London except for Rose, who is in Copenhagen.)
For syndicate of lenders co-led by National Bank Financial Inc. (Montreal)
Blake, Cassels & Graydon:
Financial services: Gabriel Bastien, Katherine Girard, and Sébastien Vilder. National Bank Financial is a subsidiary of National Bank of Canada, which acted as administrative agent.
For target Statoil Fuel & Retail ASA (Oslo)
Legal counsel Stig Smedsvig.
M&A/Capital markets: Erik Thynnes. (He is in Oslo.)
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Vancouver-based Ivanhoe Mines Ltd. has completed one of the largest rights offerings in Canadian history, a $1.8 billion deal that will finance the continued development of Ivanhoe's Oyu Tolgoi copper and gold mining project in Mongolia. The rights offering, which closed on July 19, was the centerpiece of a complex $7.3 billion financing plan for the massive Oyu Tolgoi mine, Ivanhoe's largest project.
Ivanhoe is 51 percent owned by London-based global mining giant Rio Tinto plc, which took control of the Canadian company in April. Rio Tinto essentially guaranteed the offering, saying it would buy the maximum number of shares to which it is entitled; in addition, it offered a standby agreement to buy up to the full value of the offering, acquiring any common shares not bought up by other Ivanhoe shareholders.
The financing package contained two other major elements beyond the rights offering by Rio Tinto: $34 billion in project financing from third-party lenders, with a completion support guarantee from Rio Tinto; and a $1.5 billion short-term bridge facility, also provided by Rio Tinto.
The Oyu Tolgoi mine is a $13 billion development that is the engine of the Mongolian economy. By some estimates it will eventually account for one-third of the Asian country's economy. At press time it was expected to enter into commercial production in 2013.
For issuer Ivanhoe Mines Ltd. (Vancouver)
Corporate/M&A/Mining: Gesta Abols, Paul Goldman, Stephen Halperin, Grant McGlaughlin, Steven Robertson, Bruce Wright, and associates Kara Hardin, Roland Hurst, and Jonathan O'Connor. Tax: associate David Veneziano. Real estate/Mining: Maria Davidson. (Abols, Halperin, McGlaughlin, and Veneziano are in Toronto; the others are in Vancouver.) Goodmans has represented Ivanhoe as its lead counsel since the company's incorporation in 1994.
Paul, Weiss, Rifkind, Wharton & Garrison:
Corporate/Securities: Andrew Foley, Edwin Maynard, and counsel Scott Fisher and Phillip Heimowitz. Tax: David Mayo. Environmental: counsel William O'Brian. (Foley is in Toronto. The others are in New York.)
For shareholder Rio Tinto plc (London)
General counsel Warren Goodman and senior corporate counsel Marcus Dowding. (They are in London.)
Corporate/M&A/Mining: Philippe Fortier, Brian Graves, Ian Michael, David Randell, Shea Small, counsel Gary Litwack, and associates Ryan Hornby and Genevieve Pinto. Finance: Lynn Parsons. Tax: Jerald Wortsman. Competition: Oliver Borgers. (All are in Toronto except for Fortier, who is Montreal, and Pinto, who is in Vancouver.)
Corporate/M&A: Tom Shropshire and associate Tai Vivatvaraphol. (They are in London.)
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There won't be any reason to put up a "For Rent" notice: Toronto-based Starlight REIT completed a deal on June 29 for $1 billion to privatize TransGlobe Apartment REIT. The deal comes just two years after TransGlobe went public.
Starlight paid $13.99 per REIT unit, or a 19 percent premium over the 20-day volume-weighted average price for TransGlobe, which is also based in Toronto.
The parties in this deal know each other well. Starlight boss Daniel Drimmer has sold significant numbers of properties to TransGlobe through another company, DrimmerCo., including 51 properties in July 2011.
As part of the latest transaction, 14 of the TransGlobe holdings will be spun out to Toronto-based Cap REIT, another 26 will go to Timberlake Asset Management of Toronto, and a joint venture between Starlight and the Public Sector Pension Investment Boarda government-owned corporation that invests on behalf of the pension plans of the public service, the Canadian Forces, and the Royal Canadian Mounted Policewill own 72 apartment buildings. Starlight will end up with 63 properties.
There have been reports that Drimmer will somehow take TransGlobe public again through a capital pool company he owns called Wand Capital Corp., which has been converted into True North Apartment REIT.
TransGlobe owns a portfolio of 176 residential rental properties containing more than 21,770 apartments in Alberta, Ontario, Quebec, New Brunswick, and Nova Scotia.
For acquiror Starlight REIT (Toronto)
Real estate and development: Jonathan Freeman and David Redmond. Securities: Joan Beck, Lindsay Clements, Tom Koutoulakis, Lawrence Wilder, and associates Adria Leung and Pollyanna Lord. Tax: Ken Snider and associates Michael Platt and Janice Vohrah. Employment: Laurie Jessome. Competition: Chris Hersh and associate Imran Ahmad. Financial services: Jason Arbuck and associate Suhuyini Abudulai. (They are in Toronto.)
Bloom Lanys Professional Corporation:
Real estate: Barbara Lanys and Jessica Penley. (They are in Toronto.)
For target TransGlobe Apartment REIT, its board and special committee (Toronto)
Blake, Cassels & Graydon:
Securities: Tim Andison, Shlomi Feiner, Will Fung, Michael Gans, Chris Hewat, and associates Saad Ahmad, Matthew Merkley, Ken Ng, and Julia Tomson. Real estate: Sylvana D'Alimonte, Daniel Ferreira, and associate Lauren Temple. Tax: Allan Gelkopf, Chris Van Loan, and associates Josh Jones and Andrew Spiro. Business: Kurt Sarno and associate Thomas Row. Litigation: Ryder Gilliland and associate Kaley Pulfer. Competition: Deborah Salzberger and associate Lucian Vital. (All are in Toronto except for Ferreira, who is in Montreal.) Blakes has represented TransGlobe since 2010, including its initial public offering in 2010 and subsequent acquisition and financing transactions.