The takeover deal will allow Nova to strengthen its balance sheet so it can keep operating and expanding, the firms said. The Alberta government said early this month it would not give Nova the $100 million in funding it needed before March. Over the past month several bond rating agencies downgraded Nova debt over fears that it may not be able to meet its obligations to lenders. Its marquee asset is the Joffre petrochemical complex in central Alberta, one of the world's largest and seen as strategically key due to a low-cost supply of ethane, a building block for ethylene and polyethylene. The global economic downturn has cut demand for such materials. Nova is known for plants that make ethylene, polyethylene, styrene and its derivatives. It won a new $150 million credit facility with Export Development Canada on Sunday, allowing it to meet its commitments. The stock had been beaten down in recent months by financial weakness in the chemical industry and fears about the company's ability to meet debt obligations. Its New York-listed stock soared 300 percent to $5.36. Nova shares surged C$5.14, or 310 percent, to C$6.80 on the Toronto Stock Exchange. Under the deal, IPIC is offering $6 a share for all of the outstanding shares of Nova Chemicals, which is based in Canada but has its executive offices in the Pittsburgh, Pennsylvania.
With assumed debt, the deal is valued at $2.3 billion. No cash balance or cash flow is included in the calculation.Abu Dhabi state-owned International Petroleum Investment Co launched a $500-million takeover bid for Nova Chemicals Corp on Monday, a friendly deal to rescue the raw plastics maker from severe financial pressure due to its high debt. Please note all regulatory considerations regarding the presentation of fees must be taken into account. Backtested results are adjusted to reflect the reinvestment of dividends and other income and, except where otherwise indicated, are presented gross-of fees and do not include the effect of backtested transaction costs, management fees, performance fees or expenses, if applicable. Actual performance may differ significantly from backtested performance. Further, backtesting allows the security selection methodology to be adjusted until past returns are maximized.
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