Toronto Company Says It Wants To Block Imperial’s Texaco-Canada Purchase
TORONTO (AP) _ A small Toronto company says it wants to block the multibillion-dollar takeover of Texaco Canada Inc. and make a bid itself for Canada’s fourth- largest oil company.
The president of Barron Hunter Hargrave Strategic Resources Ltd., a penny- stock company that trades on the Alberta Stock Exchange, made the statement Monday after the exchange forced the company to clarify a news release issued last week.
Texaco Inc., based in White Plains, N.Y., announced Jan. 20 that it was selling its 78 percent stake in Texaco Canada to Imperial Oil Ltd. of Canada for $3.24 billion. Imperial is 69 percent owned by Exxon Corp., the largest U.S. oil company.
While analysts dismissed the new 11th-hour bid, John Hargrave said his firm has backers that will finance an offer for Texaco Canada if the federal Competition Tribunal blocks the megamerger.
Last week, the company issued a cryptic statement saying it had ″entered into an agreement″ with Texaco Inc. last September ″regarding the acquisition of Texaco Canada.″
But the Alberta exchange ordered the company, which has small mining and oil interests, to issue a clarification Monday.
The new release made it clear the ″agreement″ with Texaco was only a confidentiality agreement, which was signed by several companies that wanted to review the U.S. oil giant’s information on its Canadian subsidiary.
Hargrave also said he had ″confidential information″ that Imperial was planning to sell gas stations to Petro-Canada.
Imperial spokesman Dennis Baxter said Monday he hadn’t heard of the company’s involvement, while a Texaco spokesman said several companies had signed the confidentiality agreements.
News of the company’s involvement was apparently leaked prior to last week’s statement as the share price jumped to 7 cents from 4 cents in active trading.
On Monday, the share price rose another penny to 8 cents on a volume of 168,000 shares.
But Hargrave said he is not simply trying to boost the stock price.
″If we wanted a stock play, we could have done it for Christmas, but we didn’t,″ he said in a telephone interview.
″If the tribunal dissolved the deal, we are prepared to make a bid.″
Hargrave wouldn’t reveal the names of his backers, saying only that one was a ″big bank″ and the other a ″big brokerage.″
Imperial closed the deal earlier this month, but it is awaiting approval from the Bureau of Competition Policy, the Canadian agency that investigates monopolies.
The bureau has indicated that Imperial must sell some of its assets before the deal can be approved.
Hargrave said Imperial Oil was able to bid ″higher than market price because it is getting a near monopoly in gasoline sales in Ontario.″
He said Barron Hunter Hargrave would intervene at the tribunal hearing and seek the dissolution of the deal, adding that it was the ″height of arrogance″ for Imperial to close the transaction before the tribunal ruled on it.