Boyd Erman in today’s Globe writes:
"Houston-based Magnum is buying NuLoch Resources for $327-million, in a deal announced last week. Since then, some bankers report heightened interest from more mid-tier American buyers.
One perceived advantage for American oil and gas companies looking at buying in Canada is that they can get more leverage than Canadian acquirers, giving them a cost of capital advantage. American banks are willing to lend smaller oil companies more, with as much as twice as much debt per dollar of cash flow on offer. They also have access to more financing in other areas of the capital structure such as bond debt and preferred shares, bankers say.
The disappearance of the trust structure, which allowed many Canadian producers to trade at high multiples, is also tilting the balance back toward American buyers."
Tuesday, January 25, 2011
Posted by Brent Fullard at 10:14 AM