UTS Energy Rejects Total’s Offer as ‘Inadequate’
By Jim Polson
Feb. 9 (Bloomberg) -- UTS Energy Corp.’s board said Total SA’s C$617 million ($506 million) offer for the Canadian oil- sands explorer is “inadequate” and recommended shareholders reject the bid by Europe’s third-largest petroleum company.
The board formed a special committee to “pursue various initiatives with the objective of maximizing value for all shareholders,” Calgary-based UTS said today in a statement.
Total offered C$1.30 a share on Jan. 28 for UTS, which owns a stake in the Fort Hills oil-mining project in Alberta. Paris- based Total, the world’s sixth-largest energy company, plans to spend $10 billion to $15 billion over 10 years to develop Alberta oil sands, the largest crude reserves outside Saudi Arabia.
UTS rose 1 cent to C$1.71 as of 9:35 a.m. in trading on the Toronto Stock Exchange. That’s 32 percent higher than the Total bid, a sign investors expect a higher offer. The stock dropped 85 percent last year as crude-oil prices fell. They’ve doubled since the Total offer.
UTS said today it has invested the equivalent of C$3.57 a share in oil-sands projects, calling the Total bid “opportunistic.” Total spokeswoman Lisa Wyler was unavailable for immediate comment.
Last Updated: February 9, 2009 09:46 EST
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