Following weeks of nasty accusations by both sides in a high profile hostile takeover attempt, Canadian Superior Energy Inc. has quietly withdrawn its bid for Calgary crosstown rival Canadian 88 Energy Corp., citing Canadian 88’s “erosion” of shareholder value relative to its own. Canadian Superior also cited Canadian 88’s refusal to provide requested information in its takeover attempt.

The announcement closes out a two-month-long battle that began in April, when Canadian Superior offered 2.75 of its shares for every Canadian 88 share in a deal said to be worth about C$700 million (US$461 million), a deal that was quickly rejected (see Daily GPI, April 27; May 11).

The stock swap deal would have put Canadian 88 founder and former CEO Greg Noval, who is now Canadian Superior’s CEO, back in charge. Noval left Canadian 88 in 2000, but he remains on its board of directors.

Noval, who led Canadian 88 for almost 13 years, was apparently forced out of the CEO chair when Charlotte, NC-based Duke Energy bought 20% of the mid-size gas explorer (see Daily GPI, March 21, 2000), but has said that revenge did not play a part in his company’s decision to go after its bigger rival. Canadian 88 has indicated it may attempt to remove Noval from its board in a board meeting scheduled in July. In its withdrawal statement Monday, Canadian Superior said Canadian 88’s board of directors did not intend to “allow Canadian 88’s shareholders the timely right to vote on the removal of their current board of directors.”

Downplaying the acrimonious dealings of the past two months, Richard Watkins, Superior’s vice president of corporate development, said, “The Canadian Superior proposal represents a premium offer to Canadian 88 shareholders, but we are not prepared to proceed forward at this time if Canadian 88 is not prepared to provide us with the same kind of critical information they have required from us.” Watkins said Canadian Superior would instead focus on its current assets.

“Canadian Superior is in the process of working toward completing a transaction regarding the company’s East Coast holdings offshore Nova Scotia,” Watkins said. “Accordingly, given the continued delays and uncertainty regarding Canadian 88, we are withdrawing our merger proposal. Considering all the circumstances and the tremendous upside our East Coast holdings offer our current shareholders, the board cannot justify proceeding any further with the Canadian 88 merger proposal.”

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