Hal Kvisle, president and CEO of TransCanada, addresses shareholders at the company's annual meeting in Calgary, May 1, 2009.Jeff McIntosh/The Canadian Press
Talisman Energy Inc. CEO Hal Kvisle is casting himself as the ultimate free market cheerleader, arguing Canadians rules against foreign takeovers should be extremely lax.
He named companies he thinks should be welcome buyers, including controversial Chinese ones. And says politicians and bureaucrats should butt out of the business of deciding who gets to buy Canadian companies. That said, he doesn't think it should be a free-for-all.
"I actually don't think there should be protected [Canadian] companies," he said in an interview Tuesday. "But it seems there's a strong feeling in Canada there should be preferred acquirers versus acquisition companies that we'd really rather not sell to. And a lot of that seems to [centre] around the state-owned enterprise side of it."
Picking and choosing buyers is dicey, said Mr. Kvisle, adding that boards can judge what kind of takeover company they are negotiating with.
"If it is a state-owned company that primarily operates as a commercial venture with minimal political interference, then I think we should welcome those companies to Canada," he said. Norway's Statoil, he said, is a prime example.
"Another good example in that same category, I think, is Petronas," he said. "I think all of this turmoil over the Petronas-Progress deal is really unfortunate and Canada should be welcoming companies like that to come and be active players here."
This is a gutsy statement, especially coming from a respected and high-ranking Calgary CEO. No one questions whether Statoil should be digging around Fort McMurray. But Mr. Kvisle's support for Petronas puts him squarely at odds with the Canadian government, which just slammed the door on Petronas' bid for Progress Energy Resources Corp. Petronas is under Malaysia's control and while many of Calgary's executives and dealmakers may agree, they don't say it out loud.
Talisman has long been considered a takeover candidate, and speculation has helped its stock. A legislative shield over Talisman, or extremely tight rules for foreign investors, could dampen the company's shares. The same goes for other Canadian companies which the market considers takeover targets.
Mr. Kvisle also waded into China, which is even more controversial than the Petronas deal. CNOOC's blockbuster proposal to buy Nexen is believed to have messed with Petronas' acquisition ambitions.
Sinopec, Beijing's second-largest energy firm, also belongs to the list of state-owned companies he welcomes, citing Talisman's recent deal to sell a large slice of its North Sea effort to the Chinese player.
"They are extremely professional, very technical, and very interested in increasing production," he said. Mr. Kvisle also gave the nod to PetroChina International Investment Co.'s oil sands operations. "Some of the Chinese companies are emerging as very open and constructive players," he said.
Mr. Kvisle, however, skipped over CNOOC, which would own part of Syncrude if its Nexen bid is approved. It would also own all the underperforming Long Lake oil sands project. CNOOC was the first Chinese energy company to invest in Canada, with its MEG Energy investment in 2005.
However, he doesn't believe in simply throwing open the doors to potential investors. Companies that should be kept out, he says, are those with no immediate plans to develop energy plays.
"If [Russia's] Gazprom shows up in Canada, I'd be kind of worried about that, because they have a lot of gas of their own," said Mr. Kvisle. "But to the extent that there are companies that are committed to growing production and investing and building businesses, I personally don't worry too much about it. Canada retains control over the industry."