Globe and Mail: Calgary -- PetroChina International Investment Company Ltd. [PTR-N] will buy a 60 per cent stake in privately-owned oil sands firm Athabasca Oil Sands Corp. in a deal that oil patch insiders see as a key vote of confidence in Alberta's massive bitumen reserves.
The $1.9-billion deal will give PetroChina a large stake in a company whose assets contain about five-billion barrels of bitumen.
"Oil sands projects are very capital-intensive long-term investments and difficult to fully finance in the traditional equity market," Athabasca chairman Bill Gallacher said in a release. Athabasca "therefore decided to look for joint venture partners, and these strategic joint venture arrangements with PetroChina, one of the world's largest energy companies, can ensure that the MacKay River and Dover projects will be developed in timely manner, which is excellent news for Alberta and the rest of Canada."
Rumours of the impending deal pushed up shares in several small junior oil sands companies, including UTS Energy Corp. [UTS-T] and Connacher Oil and Gas Ltd. [CLL-T], on a belief that major outside investment interests are once again prepared to invest in the oil sands.
"It's great news for the oil sands business. It shows that there are still large, sophisticated, deep-pocketed companies out there prepared to write big cheques," said one Calgary banker.
In return we get the chance to 'invest' in the dollar store crap this oil grab will enable China to continue to produce to satisfy our 'needs'
Canada's biggest dollar-store chain, which expanded and prospered while consumers pinched their pennies, now plans to go public as the economy heals and markets thaw.
Dollarama Group LP, the Montreal-based chain with 585 stores, plans an initial public offering of more than $250-million this fall, cashing in on its success during the recession, investment banking sources said.
The deal marks the continued thawing of an IPO market that froze during the financial crisis. It also gives its majority owner, Bain Capital LLC, a much-needed win.
An IPO from a name-brand company such as Dollarama would mark the third large corporate debut on Canadian public markets in as many months, marking the end of a nine-month drought in IPOs that began in 2008. Insurer Genworth MI Canada Inc. and power company Magma Energy Corp. went public on the Toronto Stock Exchange this summer, raising $850-million and $100-million respectively.
A number of companies have also sold stock recently as investors bet on a full-fledged recovery. WestJet Airlines Ltd. raised $150-million this week, and investment bankers said Dollarama would make much the same pitch to potential shareholders.
Discount and dollar stores have generally been able to make sales gains in the recession as cash-strapped consumers look for bargains.
Dollarama recently hired advisers to work on the sale of 25 to 30 per cent of the company, sources said. The chain is 80 per cent controlled by Boston-based Bain, which purchased its stake in 2004 from chief executive officer Larry Rossy in a deal that valued Dollarama at $1-billion.
Bain is expected to target its IPO campaign at Canadian investors, as domestic retailers such as Shoppers Drug Mart Corp. and Loblaw Cos. Ltd. draw premium valuations compared with U.S. peers. As the leading player in its sector, Dollarama will attempt to claim the same lofty status. Bain was a minority owner of Shoppers when the drugstore chain went public in 2001.
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