Nexen, Progress, approvals applauded by CEOs

The association representing 150 chief executives of Canada's largest firms applauded Ottawa's approval of both the Nexen and Progress Energy Resources takeovers Friday.
The Nexen building in downtown Calgary.

The association representing 150 chief executives of Canada's largest firms applauded Ottawa's approval of both the Nexen and Progress Energy Resources takeovers Friday.

The federal government approved the $15.1-billion takeover of Nexen Inc. of Calgary by the state-owned China National Offshore Oil Co. and the $6-billion bid by Malaysian state-owned oil firm Petronas for Calgary-based Progress Energy Resources.

The approvals send "a positive signal to investors in Canada and around the world," John Manley, CEO of the Canadian Council of Chief Executives said in a release.

"Canada welcomes foreign investment because it is good for our economy, good for job creation and increases competition, which in turn strengthens productivity," Manley said.

"It appears that the guidelines introduced today will safeguard the national interest while ensuring that Canadians continue to reap the benefits of a welcoming approach to foreign investment."

The oil industry, which invested $51 billion in 2010, relies heavily on foreign capital.

Trading volatile

Trading in the shares of both companies was heavy and volatile ahead of the announcement.

Nexen stock was halted for three minutes at 3 p.m. ET, even before the government made its announcement.

The halt was triggered automatically, once the price dropped by more than 10 per cent. Volume was 3.6 million shares.

The stock lost as much as 15.6 per cent and gained as much at 3.5 per cent during the session. It closed at $23.29, down $1.58 or 6.35 per cent. CNOOC's bid was worth $27.50 a share.

Volume in Nexen in New York was 28.6 million, almost four times the usual. In after-hours trading, its shares gained 14.8 per cent to $27 US.

Progress shares also gyrated during the session Friday, up as much as 3.8 per cent, and down by as much as eight per cent. They closed in Toronto at $19.37, down 88 cents, or 4.35 per cent.