October 29, 2008 / 9:45 PM / 10 years ago

UPDATE 1-INTERVIEW-Nexen bidders would pay steep price

* Says hostile bidders “won’t be happy”

* Nexen would launch auction in event of hostile bid

* Company could be broken up at auction (Adds details)

By Scott Haggett

CALGARY, Alberta, Oct 29 (Reuters) - Charlie Fischer, the soon-to-retire chief executive of Canadian oil producer Nexen Inc NXY.TO said on Wednesday he does not expect the company to easily succumb to any hostile takeover.

Fischer, 58, will retire from Canada’s No. 4 independent oil exploration and production company at year-end after seven years as CEO. Marvin Romanow, the chief financial officer, will then take the top job.

Fischer announced his retirement as the Financial Times reported on Wednesday that a number of major oil companies could be eyeing Nexen as an acquisition target.

While he said he could not prevent a hostile takeover, he said any buyer would pay a steep price for what he called Nexen’s “world-class” assets in Canada’s oil sands, the Gulf of Mexico, Yemen, Britain’s North Sea and elsewhere.

“There’s nothing in place stopping anybody from initiating a hostile (takeover) but anybody who does won’t be happy with the process,” he said in an interview. “Because if you’re going to disappear the only thing that matters is the price.... If someone wants to take a run at us they better be ready for a fight, and the best price wins.

Fischer said Nexen would likely go to an auction process if a hostile bidder made an attempt to buy the company.

“It might even get busted up going to auction because what we’re going to do is get the best value for shareholders,” he said.

The company’s stock jumped C$2.35, or 14.5 percent, to C$18.60 on the Toronto Stock Exchange on Wednesday as oil prices rose and Nexen reported its third-quarter profit more than doubled.

But Nexen shares, which reached a high of C$43.45 in June, have fallen back sharply since then as the oil price retreated from its record peak this summer and the financial crisis cut investor confidence.

Despite the drop by the shares, Fischer said he believes he is leaving the company in good shape. Its C$6.1 billion Long Lake oil sands project is set to begin producing synthetic crude oil within weeks.

As well, it has a strong position in the emerging shale gas area of northeastern British Columbia, promising finds in the Gulf of Mexico and big production from its Buzzard field in the North Sea.

Though the company has strong assets and growing production, Nexen’s share price has often lagged its rivals, but Fischer said the firm has been built for long-term growth, not quarterly profits aimed at pleasing market players with short attention spans.

“There’s always a flavor in the marketplace that’s preferred,” he said. “Our objective was to create a sustainable energy company that would add significant value not just in the short term but in the longer term. There are lots of investors who don’t take a long-term view.”

Fischer said Romanow was selected by the board from a number of internal candidates. He added that he won’t interfere with Nexen’s management once he resigns from the company and the board of directors.

“It’s Marvin’s show to run,” he said. ($1=$1.23 Canadian) (Editing by Rob Wilson)

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