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To: JohnM who wrote (79598)	6/25/2009 8:32:24 AM
From: JohnM	Respond to of 118717

The New York Times June 25, 2009 Chinese Oil Giant Makes Offer for Rival By CHRIS NICHOLSON The giant Chinese oil company Sinopec made a $7.22 billion takeover bid on Wednesday for the international oil and gas exploration company Addax Petroleum. The takeover would give Sinopec access to Addax’s stakes in oil fields off the coast of West Africa, as well as in Iraq. Sinopec already has interests in Gabon as well as Sudan. Its parent, the Sinopec Group, is wholly owned by the Chinese government. Sinopec, formally known as the China Petroleum and Chemical Corporation, is offering 52.80 Canadian dollars ($45.70) a share for the remaining common shares of Addax. The Addax board has recommended that shareholders accept the agreement, and senior executives have signed onto a lock-up agreement to sell Sinopec their 38 percent stake in the company. Jean Claude Gandur, the president and chief executive of Addax, said in a statement announcing the deal that the company was “pleased that Sinopec has recognized the highly attractive asset portfolio and exceptional team that we have assembled.” In a separate statement, Sinopec called the deal a “transformational transaction” that would help it expand in West Africa and Iraq, in line with its strategic objectives. The Chinese company said that Addax’s offshore deep-water exploration projects were especially promising for its growth and development. Sinopec agreed to a breakup fee of 300 million Canadian dollars if the deal fell through. Full documentation for the bid was expected to be submitted next month, and Addax, which is based in Switzerland but has shares listed in Toronto and London, would have 35 days to accept it. Citing confidentiality rules, Canada’s Department of Industry declined to comment on the proposed acquisition of Addax. It was not clear whether the government must approve the sale. Under Canadian foreign investment laws, a foreign takeover of a “Canadian business carried on in Canada with assets of $312 million or more” in Canadian dollars must be approved by the minister of industry, a spokesman for the department, Michael Hammond, said in an e-mail message. Most of Addax’s operations are overseas, however, and the company, while registered in Canada, is managed from Switzerland. Addax did not respond to questions about its regulatory status. Addax shares rose 7.3 percent on Wednesday in Toronto, to 48.96 Canadian dollars. The Sinopec offer represents a 47 percent premium over their worth before the company announced it was in takeover talks early this month. Addax is also listed in London, where its shares rose 11.6 percent, to 2,643 pence. nytimes.com