April 25 A Cenovus Energy Inc
shareholder has asked a Canadian regulator to halt the company's
recent C$17 billion ($12.6 billion) purchase of some
ConocoPhillips assets, saying the new stock issued to
help fund the deal has diluted the value of Cenovus shares.
Toronto-based Coerente Capital Management has filed a letter
with the Ontario Securities Commission, Len Racioppo,
Coerente's managing director, said in an email to Reuters on
"It is pretty outrageous that they would do a deal that
would dilute shareholders by 47 percent and not bring it to a
vote," Racioppo said, confirming a comment he made earlier to
the Financial Post. "If you're going to transform a company
without asking shareholders — I don't care if it's legal — it's
not right," he added.
Racioppo told the Financial Post he had asked the regulator
to halt the deal pending a shareholder vote. Coerente owns or
controls 524,000 Cenovus shares for its clients, according to
the Financial Post.
Cenovus last month agreed to buy most of ConocoPhillips'
Canadian oil and gas assets in a deal that effectively doubled
the size of the Canadian oil company, but dented its pristine
balance sheet and pushed it into the largely unknown territory
of natural gas.
The acquisition was funded in part through the selling of
new shares, but the deal is structured in a way that it does not
require shareholder approval. Cenovus reports earnings and holds
its shareholder meeting on Wednesday..
Cenovus shares were flat on Tuesday, having lost about a
fifth of their value since the deal was announced. The
commission declined to comment, and Cenovus did not immediately
respond to a request for comment.
(Reporting by Denny Thomas in Toronto and Ethan Lou in Calgary,
Alberta; Editing by David Gregorio)