SINIPECT Acquires Daylight Energy for $2.2 Billion

Some fantastic news for this wonderful thanks giving long weekend; I just arrived home to discover that Daylight Energy DAY.TO 9.94 [0.00] has just been acquired by Chinese SINOPEC for $2.2 billion dollars or $10.08 a share.

CALGARY -(Dow Jones)- Canadian oil and gas producer Daylight Energy Ltd. (DAY.T) said Sunday it will be acquired by China Petrochemical Corp. (600028.SH) for 2.2 billion Canadian dollars ($2.12 billion). 

It’s the second takeover of a Canadian energy company by a Chinese state-owned entity, after China’s CNOOC Ltd. (CEO) acquired bankrupt oil-sands producer OPTI Canada Inc. in July.

China Petrochemical, as known as Sinopec, is paying a hefty premium for Daylight, which produces light oil and natural gas from properties in northeast British Columbia and northwestern Alberta. The offer is worth C$10.08 a share, or more than twice Daylight Energy’s closing price on Friday, and a 44% premium to the 60-day moving average share price. 

The FULL NR can be found here.

We all know how the Chinese are deploying their US$ into natural resources all over the world. This is not the first time they acquire Canadian assets and will certainly not be the last time. It saddens me to see our Canadian producers getting bought by foreigners. Foreigners should be buying our oil and gas through pipelines and LNG export terminals and NOT our companies. Unfortunately, it seems the political will to get these projects on the fast track is lacking because the government does not understand Canada’s powerful energy potential.

Trade of the year:

I have been working these past 2 days on a post due for publishing tomorrow discussing Daylight’s dividend. I strongly believed that the dividend was NOT in danger and had just started a position on Friday just 2 days ago! My plan was to double the position if the price went significantly lower but too late for that now.

daylight trade of 2011

The trade has not even SETTLED yet and I am sitting on more than %100 in profit which makes it THE trade of the year!

I bought DAY for the dividends based on its quality assets. The buyout was a major surprise and honestly I would have preferred to have SKW (the disappointment of the year) get taken out instead. Don’t get me wrong, I am not complaining! DAY will be replaced with another dividend payer and I know exactly who it will be….

Cheers to all the Daylight shareholders and thanks for the reader who emailed me this news; Peter, you made my DAY!

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