Mohawk, the biggest retailer of ethanol-blended gasolines in Western Canada, is being pursued by Husky Oil of Calgary and Balaclava Enterprises of Vancouver.
Mohawk has an ethanol plant at Minnedosa, Man., and buys the ethanol production of the Pound-Maker Agventures plant at Lanigan, Sask.
Husky and Balaclava are offering $7.25 a share for Mohawk.
“The bid is part of Husky’s long-term strategy to substantially increase the size of its downstream business,” said John Lau, chief executive officer of Husky Oil Ltd., in a news release.
Read Also
Alberta crop diversification centres receive funding
$5.2 million of provincial funding pumped into crop diversity research centres
“The combination of Husky and Mohawk stations will lead to a strong retail presence across Western Canada. We believe this is a fair and equitable offer which recognizes the value of this well-established Canadian company.”
Mohawk’s board of directors accepted the bid and has recommended it to shareholders.
The offer is conditional on 90 percent of Mohawk common shares being deposited to the bid, including the approximately 21 percent already held by Balaclava.
Letters explaining the offer were sent to Mohawk shareholders June 5 and the offer expires July 6.
Husky spokesperson Laurel Nichol said until the deal is complete, details about how Mohawk’s operations will fit into Husky’s can’t be worked out. But she said in an interview Husky was aware of Mohawk’s environmental products when it made its bid.
“We are very pleased with Mohawk’s position in the marketplace,” she said.
If the deal goes through, Husky will have to evaluate whether to adopt the environmentally friendly fuel program into the combined system, she added.
Brad Wildeman, head of Pound-Maker, could not be reached for comment, but his office said he planned to meet with Husky this week to discuss the situation.
