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

coins jump into piggy bank
Dividend Stocks

How to Use Your TFSA to Earn $1,057/Year in Tax-Free Income

Investing $5,000 in each of these high-yield dividend stocks can help you earn over $1,057 per year in tax-free income.

Read more »

data analyze research
Tech Stocks

Is BlackBerry (TSX:BB) a Buy in May 2025?

While its recent downturn might not look pretty, it might be the best opportunity to buy BlackBerry (TSX:BB) stock and…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Investing

Where I’d Invest the New $7,000 TFSA Contribution Limit in 2025

If you have $7,000 for the new TFSA contribution increase, here are three stocks I would contemplate adding to the…

Read more »

open vault at bank
Bank Stocks

2 Banking Stocks I’d Buy With $7,000 Whenever They Dip in Price

Two banking stocks are worth buying on the dip and as reliable passive-income providers.

Read more »

Paper Canadian currency of various denominations
Investing

How I’d Invest $7,000 in Financial Sector Stocks for Stability

This Canadian financials ETF may stay insulated from Trump's tariffs.

Read more »

Man in fedora smiles into camera
Dividend Stocks

How I’d Build a $20,000 Retirement Portfolio With These 3 TSX Dividend All-Stars

If you're worried about returns and want to focus on dividends, these dividend stocks are the first to consider.

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

If I Could Only Buy and Hold a Single Canadian Stock, This Would Be It

Here's why this high-quality defensive growth stock is one of the best Canadian companies to buy now and hold for…

Read more »

dividends can compound over time
Dividend Stocks

3 Canadian Market Leaders Where I’d Invest $10,000 for Sustained Performance

Market leaders like Alimentation Couche-Tard Inc (TSX:ATD) are worth an investment.

Read more »