IN THE NEWS / Regulators Probing PrimeWest Energy Trust
Takeover fight for Orion and Starcor investigated
By CLAUDIA CATTANEO
The Financial Post
Securities regulators are investigating whether PrimeWest Energy Trust broke trading rules in its hostile takeover fight for two competing trusts, Orion Energy Trust and Starcor Energy Royalty Fund.
Regulators in Alberta, Ontario, and B.C. are reviewing purchases by PrimeWest of the targeted funds' units made 90 days before the bid was announced Dec. 11.
They want to know if PrimeWest broke so-called pre-bid integration rules, said Alberta Securities Commission lawyer Marsha Manulescu.
Depending on the results, a hearing on the issue may be held before PrimeWest's bid expires Jan. 22.
Calgary-based PrimeWest announced Dec. 11 offers to take over the funds. The bids value Starcor at $95-million, including the assumption of $28.5-million in debt, and Orion at $105-million, including $34-million in debt. PrimeWest is offering 1.207 of its units for each Starcor unit, and 0.968 PrimeWest units for each Orion unit.
PrimeWest's bid, which was due to expire yesterday,a was extended on the weekend.
It acquired the units in the market to establish toehold positions. But securities laws require that terms offered in purchases made 90 days prior to a takeover bid must also be extended in the bid.
The targeted funds are hoping the commissions will order PrimeWest to amend its takeover bids and offer cash, rather than its own paper, as it did when it purchased Starcor and Orion units in the market, or that the bids be scrapped altogether.
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