Nexen, Progress rally after Canada clears foreign takeovers

Mon Dec 10, 2012 10:21am EST
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(Adds details, background)
    * Nexen rises 14 percent, Progress up 13 pct
    * Athabasca Oil, Meg Energy fall

    By Claire Sibonney
    TORONTO, Dec 10 (Reuters) - Shares of Canadian takeover
targets Nexen Inc and Progress Energy Resources Corp
 jumped on Monday after the Canadian government approved
the two controversial bids for the oil companies by state-owned
    Nexen was up 14.3 percent to C$26.61 on Canada's green light
for China's biggest foreign takeover, the $15.1 billion
acquisition by CNOOC Ltd. Progress Energy climbed 13.4
percent to C$21.96 on the go-ahead for the $5.3 billion takeover
by Malaysia's Petronas.
    But some smaller oil sands plays were hurt after Canada
announced new rules limiting future acquisitions by foreign
state-owned enterprises. Meg Energy Corp and Athabasca
Oil Corp both fell 3 percent in early trading and were
two of the biggest weights on the broader Toronto market.
    The mixed market reaction to Canada's ruling follows months
of heated debate about how much of Canada's energy sector could
and should be absorbed by companies run by other
    The greater clarity on foreign investment rules could buoy
stocks of companies seen as likely takeover targets.
    However, some analysts cautioned that by drawing a line in
the sand against future acquisitions by foreign state-owned
enterprises, the Canadian government could be seen as raising
hurdles for takeovers in general.

 (Additional reporting by Solarina Ho;editing by Sofina