CVE - Why Cenovus Energy Plunged 15% in Early Trading Today
Shares of Canadian integrated oil and natural gas driller Cenovus Energy (NYSE: CVE) dropped just shy of 15% as trading opened on Oct. 26. Meanwhile, Canada's Husky Energy (NASDAQOTH: HUSKF) rose as much as 20% at one point. By noon EDT, Cenovus was down by around 12%, but Husky was only up roughly 8%. Both moved for the same reason -- Cenovus has agreed to buy Husky.
Husky shareholders will receive 0.7845 of Cenovus shares and 0.0651 of a Cenovus purchase warrant in exchange for each Husky share they own. Including the warrants, this is a 23% premium to the five-day average price at Oct. 23. The warrants are good for five years with an exercise price of CAD$6.54 per share. The deal values Husky at CAD$3.8 billion.
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Why Cenovus Energy Plunged 15% in Early Trading Today