Encana Corp. has accepted to purchase for cancellation 47,333,333 of its common shares at US$4.50 apiece, for a total price of about US$213 million, matching the company's intended maximum amount for the share buyback offer.
The shares to be purchased represented about 3.5% of the issued and outstanding shares at the time when the offer launched in July. Based on the final results of the substantial issuer bid, 127,957,593 Encana shares were properly tendered and not properly withdrawn, according to a Sept. 4 news release.
Due to oversubscription, shareholders who made auction tenders at US$4.50 per share or less and purchase price tenders will have about 70.69% of their successfully tendered shares bought by Encana. Those who made auction tenders at more than US$4.50 apiece will have their shares returned by AST Trust Co. (Canada), the depositary for the offer.
The paid-up capital per share is roughly C$8.39, or US$6.31, based on the Bank of Canada daily average foreign exchange rate as of Aug. 28. Since the amount is higher than the purchase price of US$4.50 per share, shareholders who sold shares to Encana will not get a taxable dividend from the sale.
Calgary, Alberta-based Encana is an oil and gas producer that owns assets in shale plays, including the Montney and Duvernay shales in British Columbia and Alberta.
