.png)
A Pengrowth Energy facility in Lindbergh, Alberta. Analyst Jeffrey Craig says the company’s acceptance of a five-cent-per-share takeout bid "might be a canary in the coal mine" for companies with unsurmountable debt. Weighed down by burdensome debt and tightening capital flows, Alberta’s energy sector is looking toward consolidation as a solution, but in a market with few buyers, sellers might have to be willing to take a discount. According to a report published on Oct. 30 by Sayer Energy Advisors, a Calgary-based broker in the merger and acquisitions space, the value of oil and gas assets that are domiciled in Alberta and available for sale has more than doubled to $3.7 billion from $1.8 billion at this time last year. The sudden increase can be attributed to a lack of capital and activity in the sector’s M&A space, the report said. In other words, debt-ridden companies are struggling with financings and are putting their assets up for sale, only to find few interested buyers. The lack of enthusiasm was reflected in Pengrowth Energy Corporation’s acceptance of a five-cent-per-share takeout bid when the company’s stock had been trading been trading 400 per cent above that level. While the deal hasn’t […]
