EnCana Corp. shares (ECA.TO) fell sharply last week on the Toronto Stock Exchange to $46.71 by Friday morning from more than $55/share on Monday following news that the company recommended that shareholders reject an unsolicited mini-tender offer. TRC Capital Corp. (TRC Capital) made a tender offer for up to two million shares, or 25% of the outstanding common shares of the company, at an offer price of C$54.50/share.
EnCana noted that the offer represented a 3.96% discount to the C$56.75 closing price for its common shares on the Toronto Stock Exchange on Jan. 31, the day before the offer was made. However, since that day, the value of ECA shares has fallen nearly 18% in part because of investor reaction to falling gas prices and warm winter weather.
EnCana said TRC Capital's unsolicited offer is not related to EnCana's previously announced normal course issuer bid for the purchase, from time to time, of up to 85.6 million common shares on the Toronto Stock Exchange and the New York Stock Exchange.
ECA shares peaked near $70/share last October but cascaded down steadily following the announcement that company founder and CEO Gwyn Morgan would step down. Morgan remains executive vice chairman for 2006, working mainly as an advisor for the new president and CEO, Randall K. Eresman.
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