MONTREAL (AFP) — French petroleum giant Total is considering making a 16 billion dollar (US) offer for Canada's Nexen oil company, the online edition of Financial Times said Tuesday.
The daily quoted sources with knowledge of the French company as saying Total was not intending to make a hostile bid for Nexen, which it valued at 16.1 billion dollars (19.7 billion Canadian dollars), or 38 dollars per share.
The possible offer was discussed during a Total board meeting on Tuesday, it added.
Nexen owns significant oil sands deposits in western Alberta province, and other assets in the United States, the North Sea and Yemen.
To finance part of the possible buyout offer, Total has secured a financing package of 9.5 billion dollars from five banks: Societe General, HSBC, BNP Paribas, RBS and Credit Agricole, the daily said.
News of the possible transaction sent Nexen stocks soaring nine percent Tuesday on the Toronto Stock Exchange. Nexen stocks closed at 23.88 dollars, but hit a high of 29.10 dollars during the day, with 26 million stocks changing hands.
Nexen issued a statement saying it was "not aware of any corporate developments to account for this activity" on its market value.
"Our policy is not to comment on rumors or speculation and accordingly, we do not intend to comment further," it added.
Over the past few years, Total has bolstered its presence in Alberta's oil sands deposits that hold the world's largest oil reserves after Saudi Arabia, with an estimated 173 billion barrels of oil.
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