Newspaper article THE JOURNAL RECORD

Chevron to Sell Gulf Canada Shares for Record $2.2 Billion

Newspaper article THE JOURNAL RECORD

Chevron to Sell Gulf Canada Shares for Record $2.2 Billion

Article excerpt

TORONTO (UPI) - Chevron Corp. said Thursday it would sell its share of Gulf Canada Ltd. to Toronto-based Olympia and York Resources Inc. for $2.2 billion in the largest takeover in Canadian history.

Chevron has agreed to sell more than 137 million outstanding common shares, or about 60.2 percent of Gulf Canada, spokesman Dale Basye said from the coompany's San Francisco headuarters.

Chevron, which borrowed heavily to buy Gulf Oil Corp. of Pittsburgh for $13.3 billion last year, said it would sell about 112 million common shares at about $16.21 a share on or before July 16, giving Olympia and York 49.24 percent of Gulf Canada.

At that time, the company said, Olympia and York also would buy an option on the remaining 25 million Gulf Canada common shares held by Chevron. The price of the option is about $4.38 per share andthe exercise price for the optioned shares is approximately $10.98 a share, the company said in a prepared statement.

""The option is exercisable prior to Dec. 31, 1985,'' Chevron said. ""Upon exercise of the option, Olympia and York will own 60.2 percent of the currently outstanding common shares of Gulf Canada for an aggregate consideration in excess of $3 billion (Cdn).''

Certain regulatory conditions must be met, Chevron added.

In Ottawa, Sinclair Stevens, Canadian Minister of Regional Industrial Expansion, said the acquisition was the biggest on record in Canada and the largest Canadianization.

Chevron also said the agreement called for Olympia and York to pay at the closing of the transaction about one half of the aggregate amount in U.S. dollars. While the balance would be received in Canadian funds, Chevron vice-president Thornton Savage said the conversion to American currency would be done over a period of time so as not to drive down the Canadian dollar. …

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