Nov 19, 2019
Major Encana Investor to Vote Against Its Plan to Flee Canada
Bloomberg News
,(Bloomberg) -- One of the largest investors in Encana Corp. said it will vote against the Canadian oil producer’s plan to move its headquarters to the U.S.
Letko, Brosseau & Associates Inc., which has a stake of about 4%, said Tuesday the proposal would force investors holding Encana shares through indexed Canadian funds or via Canadian-only investment policies to sell the stock. It also questioned Encana’s argument that new U.S. index fund investors would replace Canadian shareholders.
Key Takeaways
- Encana’s planned move south of the border hit the headlines last month as it encapsulated the gloom enveloping the Canadian oil industry and anxieties about losing major domestic companies.
- Letko, Brosseau is so far the only investor to publicly oppose the plan but its strongly worded statement may encourage others to break cover. It called Encana’s effort to re-domicile “reflects a profound absence of concern for the protection and enhancement of shareholder value.”
Market Reaction
- The shares were little-moved immediately after Letko, Brosseau issued its statement. Encana was down 3.8% at C$5.29 at of 1:11 p.m. in Toronto trading.
Get More
- Click here for the full statement from the investor.
To contact the reporter on this story: Simon Casey in New York at scasey4@bloomberg.net
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Carlos Caminada
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