CALGARY - It took China National Offshore Oil Co. a couple of tries before oil and gas giant Nexen Inc. warmed to its takeover offer, according to an information circular sent to shareholders.
The Calgary-based company (TSX:NXY) first heard rumblings in February and March that a Chinese state-owned firm may be planning to acquire it.
On May 17, Nexen chairman Barry Jackson and interim CEO Kevin Reinhart met with CNOOC executives in Vancouver, where CNOOC vice chairman Yang Hua confirmed his company was interested in a friendly deal and asked Nexen to enter into exclusive negotiations.
Later that month, Nexen's board decided the price wasn't high enough to allow CNOOC exclusive access to the information it needed to do its due diligence. On June 7, CNOOC reiterated its proposed offer, minus the exclusivity request.
At a meeting on June 13, Nexen's board once again deemed the offer too low. It decided to make a presentation to top CNOOC brass "regarding the company's assets and prospects in order to enable CNOOC to consider increasing its proposed purchase price for the company," the circular said.
Those presentations took place in Vancouver on June 20 and 21. On July 3, CNOOC raised its offer price.
"After hearing the views of management and the company's financial and legal advisers and the recommendation of the special committee, the board determined that it would not support a transaction with CNOOC at the price specified in CNOOC's July 3, 2012 letter but would consider supporting a transaction if a higher price was offered."
Jackson and Yang met in London a week later "to discuss the proposed transaction and particularly whether there was a price that CNOOC could offer that would be acceptable to the board."
Yang suggested a higher price, after which the two companies began to hammer out their deal.
The $15.1-billion, $27.50-per-share friendly deal was announced on July 23.
A special meeting is being held in Calgary on Sept. 20, where shareholders will vote on the transaction. It needs two-thirds support to go ahead.
Federal Industry Minister Christian Paradis must also review the deal to and decide whether it would be of net benefit to Canada.
Earlier this week, he said his department is still waiting for a formal proposal from the Chinese company before a review can begin.
The deal needs the go-ahead from the Competition Bureau as well.