Hiram Walker Resources, fighting a hostile takeover bid from Gulf Canada, received a friendly merger proposal Wednesday from Trans-Canada Pipelines valued at up to $3 billion.
TransCanada, a major Canadian natural gas distributor, said one of the bid’s conditions was that it be supported by Hiram Walker’s directors. But TransCanada also said the offer was not conditioned on Hiram Walker revoking its plan to sell its liquor business for nearly $2 billion.
Thus, TransCanada would be acquiring Hiram Walker for its Home Oil Co. Ltd. oil and gas subsidiary and its 34% stake in Interprovincial Pipe Line Ltd., an oil pipeline concern that in turn owns 17% of Hiram Walker.
Home Oil “has quality oil and gas reserves and good land position, both of which complement Trans-Canada’s present oil and gas investments,” Gerald J. Maier, TransCanada’s president and chief executive, said in a statement.
Hiram Walker spokesman Frank Ternan said that the company “was pleased to have another offer” and that its directors would consider TransCanada’s bid and the other proposals today.
TransCanada, which like Hiram Walker is based in Toronto, operates one of Canada’s longest gas pipeline systems.
Gulf Canada, headquartered in Calgary and 80% owned by the Reichmann family of Canada, is involved in oil and gas development and forest products.
TransCanada said it would offer $36.50 (Canadian) cash, or $26.45 at current exchange rates, for each of Hiram Walker’s 75 million common shares outstanding.