Husky Oil purchase expands outlet range in western Canada

Li Ka-shing's Husky Oil has joined forces with a management firm in Vancouver to buy an oil company in western Canada.

Husky Oil and Balaclava Enterprises, in a deal worth about C$80 million (HK$425.5 million), have made a friendly cash bid of $7.25 a share for Mohawk Canada.

Mohawk's board of directors has supported the bid and its founder Hugh Sutherland has already agreed to tender his 42 per cent shares.

Mohawk president and chief executive officer William Duncan said: 'This bid is the culmination of our exploration of strategic alternatives designed to enhance shareholder value. The board supports this bid being representative of the true value of the company's operations.' Vancouver-based Mohawk operates about 100 petrol stations in British Columbia and is the largest marketer of alternative fuels and lubricants in western Canada.

The offer is conditional on 90 per cent of the Mohawk common shares being deposited to the bid, including the approximate 21 per cent already held by Balaclava, a private management holding company in Vancouver.

Husky, a Calgary-based oil and gas producer, and Balaclava will make the bid through HB Acquisition, 91 per cent owned by Husky and 9 per cent by Balaclava.