Canada says deadline on CNOOC bid ruling could be delayed

Wed Dec 5, 2012 2:54pm EST
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By David Ljunggren and Randall Palmer

OTTAWA (Reuters) - Canadian Industry Minister Christian Paradis surprised markets on Wednesday by saying the December 10 deadline for ruling on a bid by China's CNOOC Ltd (0883.HK: Quote) for energy company Nexen Inc NXY.TO could be extended, comments that nudged Nexen's shares lower.

Paradis said he did not want his comments to be construed in any particular way.

"This is a deadline that could be extended, but once again, I won't speculate and ... I don't want to send a signal," he told reporters. "When the decisions are made and are ready to be announced, this will be done. Don't interpret anything from what I'm saying here."

The Canadian government is due to announce new foreign investment guidelines at about the same time it delivers its verdict on the CNOOC move and on a separate bid by Malaysia's Petronas PETR.UL for Progress Energy Resources Corp PRQ.TO.

Ottawa can extend the deadline beyond December 10 if CNOOC and Nexen agree, but markets mostly assumed the twice-extended deadline would stand.

Nexen shares in New York fell to $24.50 from $24.62 after Paradis spoke. That is above Tuesday's close of $24.35 but below CNOOC's $27.50 offer price.

Progress shares eased to C$20.25 in Toronto from C$20.33 before the remarks. The stock closed at C$20.32 on Tuesday. Petronas' offer is for C$22.

Shares of both Nexen and Progress have fluctuated over the last few weeks as markets try to work out what the government will decide. On October 22, Prime Minister Stephen Harper said the guidelines would come out "fairly shortly." On November 8 he said they would be issued "in the very near future."   Continued...

Canada's Industry Minister Christian Paradis speaks during Question Period in the House of Commons on Parliament Hill in Ottawa November 27, 2012. REUTERS/Chris Wattie