Canadian Occidental Petroleum Ltd.: The Wascana Energy Inc. Decision

Name: Canadian Occidental Petroleum Ltd.: The Wascana Energy Inc. Decision (English version)
SKU: 9A97N014

Stephen R. Foerster; G. Andrew Karolyi; Jerry White

Product #:9A97N014

Supplier:Ivey

Discipline:Finance, International Business

Setting:Canada, 1997

Details:Case (PDF) • 21 pages • 1997-10-24 (Rev: 2010-02-05)

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Wascana Energy Inc., an oil and gas producer, had just rejected an unsolicited $1.8 billion takeover offer from Talisman Energy Inc. Rival Canadian Occidental Petroleum Ltd. had gained access to confidential Wascana data in order to determine whether a higher bid than Talisman's was warranted, and if so, how to structure the deal. The acquisition would need to make strategic sense.

Learning Objectives

This case can be used in an introductory finance course to teach students about valuation in a strategic setting. Students should be familiar with cost of capital and time value of money concepts prior to studying this case. Specifically, this case is designed to provide an opportunity for students to learn about: the oil and gas industry; valuation of oil and gas companies; mergers and acquisitions and playing the game, including pre-acquisition agreements and shareholder rights plans; the strategy involved in merger and acquisition situations.

Canadian Occidental Petroleum Ltd.: The Wascana Energy Inc. Decision

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Learning Objectives