Abstract
THE FINANCIAL CRISIS has forced Nova Chemicals to sell out on the cheap. International Petroleum Investment Co. (IPIC), an arm of the government of Abu Dhabi, United Arab Emirates (U.A.E.), that also controls the Austrian polyolefins firm Borealis, has agreed to pay $2.3 billion, including debt, for the Calgary, Alberta-based maker of polyethylene and styrenic resins. The purchase price is $6.00 per share, representing a nearly 350% premium over Nova’s closing price of $1.34 per share on Feb. 20 and a 200% premium over the 30-day average price of its stock. Nevertheless, the purchase is more of a bailout than a sweetheart deal. Nova’s shares traded at more than $32.00 a year ago. Between the economic downturn and the credit crunch, the company has been scrounging for cash to meet its debt obligations. In a conference call following the deal’s announcement, Nova CEO Jeffrey M. Lipton told analysts that the company had been considering a ...
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have