23 February 2009 15:18 [Source: ICIS news]
(Adds background and updates throughout)
LONDON (ICIS news)--The Abu Dhabi-based International Petroleum Investment Company (IPIC) has entered an agreement to acquire Canadian petrochemicals producer NOVA Chemicals for about $2.3bn (€1.8bn), NOVA said in a statement on Monday.
IPIC has offered $6/share, which represents a 348% premium of NOVA’s value on the New York Stock Exchange at Friday’s close.
NOVA said the deal was intended to enable the company to meet all its obligations to shareholders and includes a $250m credit backstop facility to maintain the company’s liquidity.
“This acquisition will provide enhanced balance sheet strength for NOVA Chemicals and facilitate NOVA Chemicals’ growth internationally,” said IPIC managing director Khadem Al Qubaisi.
“We can provide stability and allow NOVA Chemicals to meet its operational and financial requirements while continuing to expand and invest in its business,” he added.
Under the proposed agreement, NOVA would operate as an independent chemicals and plastics company, while continuing to invest it its operating facilities in ?xml:namespace>
NOVA said the two companies’ operations were geographically complimentary, bringing together IPIC’s existing petrochemicals activities in Europe, the Middle East and Asia, with the Canadian company’s manufacturing base in
Wholly owned by the government of
The board of NOVA unanimously approved the deal and recommended it to shareholders.
The deal was subject to regulatory approval and other conditions including the approval of two thirds of its shareholders – which were expected to hold a special meeting in April.
Earlier in the day, NOVA Chemicals said it had secured $150m in new financing through a revolving credit facility with Export Development Canada (EDC) and a syndicate of three Canadian banks.
NOVA had a deadline of 28 February to raise $100m in funds to retain access to its current credit facilities.
All three major global credit watchdogs had cut NOVA’s rating due to concerns over its ability to refinance debts.
($1 = €0.78)
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