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Nova Chemicals agrees to Int'l Petroleum buyout
Monday February 23, 2009, 9:20 am EST

Nova Chemicals agrees to be purchased by Int'l Petroleum Investment for $6 per share

NEW YORK (AP) -- Nova Chemicals Corp., Canada's largest plastics producer, said Monday that it has agreed to be acquired by International Petroleum Investment Co. for $6 per share, or about $499.2 million.

Nova Chemicals has about 83.2 million shares outstanding, according to Thomson Reuters. The companies said the transaction was valued at about $2.3 billion, including the assumption of debt.

International Petroleum will also provide a $250 million credit backstop agreement to help shore up Nova Chemicals' liquidity.

Nova Chemicals' business has struggled during the global recession, with the company hurting from slumping prices and a weakening demand for plastics. Last month, Nova said it would cut 400 jobs worldwide.

The acquisition will help to broaden International Petroleum's presence, as Nova Chemicals' facilities are mostly in North America. International Petroleum has petrochemical plants in Europe, the Middle East and Asia.

The deal calls for Nova Chemicals to run as an independent chemicals and plastics company, with Chris Pappas serving as chief executive after Jeff Lipton's previously announced retirement on May 1. The company's products are used in everything from rigid and flexible packaging, to plastic bags and consumer electronics. Other uses include building and construction materials, automotive components and housewares.

The acquisition, which is not subject to a financing condition, will likely be voted on by Nova Chemicals' shareholders at a special meeting in April.

Shares of Nova Chemicals more than tripled to $4.51 in electronic premarket trading. The stock closed at $1.34 on Friday.

Source: Associated Press

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