UPDATE 1-Canada views state enterprises differently, PM says

Mon Nov 19, 2012 5:16pm EST
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* Harper says state-owned bodies "different kind of player"

* State dominance may influence takeover reviews, he says

* Shares of takeover targets Nexen and Progress edge down

By Randall Palmer

OTTAWA, Nov 19 (Reuters) - Canadian Prime Minister Stephen Harper signaled on Monday his government will treat state-owned enterprises differently than private-sector companies when it decides whether to approve foreign investments in Canada.

Ottawa is currently evaluating a $15.1 billion bid by China's state-owned CNOOC Ltd to take over Canadian oil producer Nexen Inc as well as a $5.2 billion proposal by Malaysia's Petronas to buy Progress Resources Energy Corp. Decisions are expected in the next few weeks.

At about the same time as those announcements are made, the Conservative government plans to set out a broad policy framework on direct foreign investment, although it already introduced some guidelines for investments by state-owned enterprises in 2007. The guidelines refer to the market orientation and corporate governance of foreign buyers.

"We created guidelines specifically for state-owned enterprises because - yes - state-owned enterprises represent a different kind of player and obviously those are some of the issues that are before us today," Harper said in a question-and-answer session at the Canadian American Business Council.

Shares of Nexen and Progress Energy continued edging lower following the remarks, against a 1.8 percent rise in the Toronto Stock Exchange's energy sector.   Continued...