Newspaper article The Canadian Press

Failure of MEG Takeover Deal Is 'Credit Positive' for Husky, Says Agency

Newspaper article The Canadian Press

Failure of MEG Takeover Deal Is 'Credit Positive' for Husky, Says Agency

Article excerpt

MEG deal failure 'credit positive' for Husky

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CALGARY - Shares in oilsands producer MEG Energy Corp. continued to slide Friday after a credit rating agency said rival Husky Energy Inc.'s failure to consummate a hostile takeover bid was actually "credit positive" for Husky.

After falling 35.6 per cent on Thursday, MEG stock traded down by as much as 3.3 per cent on Friday morning on the Toronto Stock Exchange.

Husky, after gaining 12.4 per cent Thursday, fell by as much as 4.2 per cent Friday.

Husky's decision to abandon its bid for MEG after more than 50 per cent of the shares were tendered by Wednesday afternoon's deadline surprised most financial analysts who had expected it to extend more time to try to achieve the two-thirds support it needed.

Moody's Investors Service, however, says the failure of the deal means Husky is avoiding taking on MEG's high debt load and a subsequent erosion in its credit worthiness. …

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