Talisman Snubs “Low Ball” Takeover Bid

GDF Suez tries to get a deal at $17 billion.

The Motley Fool

It has recently come to light that Talisman Energy Inc. (TSX:TLM, NYSE:TLM) has rejected a US$17 billion takeover offer from French-owned GDF Suez. The deal rejected by the Talisman board included all $6 billion of debt along with the company and its assets.

The company called this a “low ball” offer that was around  $1.50 per share below its average price in December (low $12.16, high $12.99). It believes that $17 billion is not enough for a company with $20.2 billion in assets, including $10.8 billion in property, plants and equipment.

Talisman also rejected a counter offer from GDF Suez for a portion of the company. This gives backing to company sentiment that “it would rather find partners than accept a low-priced sale”.

GDF Suez was hoping that along with its Chinese partner, CIC, it could muster up enough capital to pull off a major acquisition like Talisman. Some bankers have expressed concern that a deal like this could be a financial stretch for the company, which is already sitting at 30 billion euros of debt.

Foolish bottom line 

News of the rejected offer pushed Talisman’s stock up 2.15% to $12.83 a share on Monday. By rejecting this bid Talisman has underscored its commitment to “sweeping reorganization” to rebuild the company, which has had a rough few years.

In the first three quarters it posted a net income loss of $170 million, which is an improvement from the loss of $240 million in that same time period in 2012. Time will tell whether Talisman can continue its turnaround or become bait for another takeover bid.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own any shares in the companies mentioned.

More on Investing

thinking
Dividend Stocks

Should You Buy BCE Stock for its 8.6% Dividend Yield?

Down over 20% from all-time highs, BCE stock offers you a tasty dividend yield in 2024. But is the TSX…

Read more »

grow dividends
Tech Stocks

Why Nuvei Stock Jumped 26% on Monday

Nuvei (TSX:NVEI) stock saw shares surge today as the company confirmed it's in talks to go private through a buyout.

Read more »

consider the options
Investing

Better Buy for the Dividend: Enbridge or Nutrien?

Enbridge (TSX:ENB) and Nutrien (TSX:ENB) are great dividend plays for new investors going into April.

Read more »

Gold bars
Stocks for Beginners

TSX Materials in March 2024: The Best Stock to Buy Right Now

Materials have been quite volatile, though the price of gold has surged to all-time highs. That makes this stock a…

Read more »

grow dividends
Dividend Stocks

How Long Would It Take to Turn $20,000 Into $100,000 With TSX Dividend Stocks?

Here's how high-quality TSX dividend stocks and the power of compound interest can help grow your investments by 400% or…

Read more »

Happy diverse people together in the park
Tech Stocks

A Once-in-a-Generation Investment Opportunity: Artificial Intelligence (AI) Growth Stocks

Canadian tech companies like Kinaxis (TSX:KXS) are doing big things in AI.

Read more »

Paper airplanes flying on blue sky with form of growing graph
Dividend Stocks

2 Soaring Stocks I’d Buy Now With No Hesitation

These two stocks may be the most expensive on the market, but they're high for a reason! And I'm still…

Read more »

Arrowings ascending on a chalkboard
Investing

This Canadian Blue Chip Is Trouncing TSX Returns, and It Still Has Room to Run

Alimentation Couche-Tard (TSX:ATD) stock looks quite frothy heading into earnings, but there may still be upside.

Read more »