Nexen, Progress jump on report takeover policy imminent

Thu Nov 15, 2012 5:16pm EST
 
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OTTAWA (Reuters) - Nexen Inc's NXY.TO shares jumped nearly 3 percent on Thursday after a report suggested Ottawa might speed up its decision on whether to allow a $15.1 billion takeover of the Canadian oil producer by China's state-owned CNOOC Ltd 0883.HK.

The Canadian government is reviewing the proposed takeover, along with a bid by Malaysian state oil company Petronas PETR.UL for Progress Energy Resources Corp PRQ.TO to see if they pass its test of being of net benefit to Canada. It has promised to issue a new policy framework on foreign investment at the same time as it announces its decisions on the deals.

Progress stock also jumped about 3 percent on Thursday in an overall down market.

Canada's consul general in New York, John Prato, was cited by the online news service dealReporter as suggesting the new foreign investment guidelines could come this week or next week.

The news organization, which is part of the Financial Times Group, said Prato later told its reporter the government has said it would issue the guidelines in November.

The news article contained no direct quotes and Prato's office was not immediately available to confirm his remarks. A spokesman for Canadian Prime Minister Stephen Harper said: "I won't speculate on timing."

The comments were likely behind the gains in the shares of Nexen and Progress, National Bank Financial analyst Kyle Preston said.

"(The stock reaction is positive) the more we hear about the potential for the government to make a decision sooner rather than later," Preston said. "They are pretty loose indications, but the government continues to reiterate they are supportive of foreign investment."

Harper said in a press conference in Ottawa on October 22 that the announcements would come in the "not-too-distant" future.   Continued...