Carola Hoyos UTS rejects Total’s takeover bid

It appears not only Christophe de Margerie of Total believes oil prices will eventually recover: UTS Energy shareholders rejected Total’s deep pockets and diversified portfolio, ending the French company’s attempt at a hostile takeover.

The key question for shareholders was whether Fort Hills, UTS’s Athabasca oil sands play, would be developed. The answer depends in large part on whether future oil prices will be high enough to justify the environmentally messy and expensive venture.

The mining project is already delayed past its 2012 production start date and other partners Petro-Canada and Teck-Cominco are in a spot of disarray with mergers, cold feet, low oil prices and high costs making some chief execs stand back, do nothing and even consider hoping for good offers.

And what about UTS? One hint that shareholders may not be rejoicing quite as much as the past lobbying effort against Total by West Face Capital, UTS’s largest shareholder, would suggest, is today’s share price: UTS shares slid as much as 24 per cent to well below Total’s offer. Makes one think Total’s second, improved offer of C$1.75 wasn’t so cheeky after all.
Related links:

Total raises hostile bid for UTS Energy (FT, 13/04/09)
Total, the peak oil believer’s favourite IOC (FT Energy Source, 16/04/09)