Amid a dismal Q4 performance and lack of finance availability, Canada-based Nova Chemicals Corp. has nodded to the US$499 mln takeover offer from the Abu Dhabi government-owned International Petroleum Investment Co. (IPIC). Taking into account Nova Chemical's debt, the total value of the takeover deal amounts to US$2.3 bln. IPIC inked a deal with Nova to buy all outstanding common shares for a cash consideration of US$6.00/Share, a 348% premium over the February 20, 2009 closing price of the Shares on the NYSE and a 204% premium over the combined and currency-adjusted 30-day volume-weighted average price of the Shares on the Toronto Stock Exchange and NYSE up to and including February 20, 2009. The takeover deal is still awaiting Canadian government's approval. If the deal goes through, Nova can look forward to expand plastic production in Alberta and ramp up capacity expansions in Sarnia, Ontario.
Many analysts and investors began to consider the Alberta company would run bankrupt and file for protection as company was under pressure from the lenders to raise US$200 mln within a short span. "The Arrangement is intended to enable NOVA Chemicals to meet all of its obligations to all of its stakeholders and will strengthen NOVA Chemicals' balance sheet so that its strong assets will continue to operate and expand," the company release said. After the deal, Nova Chemicals will continue to operate as an independent chemicals and plastics company and invest substantially in its Alberta and Ontario operating facilities, and also in its large and very productive research and development facilities in Calgary, AB. "The opportunity to join IPIC comes at a good time for NOVA Chemicals and will enable us to offer both stability and long-term growth to many of our stakeholders," said Jeff Lipton, NOVA Chemicals' CEO. "IPIC is well financed and has a track record of working successfully with companies like ours."