(Bloomberg) -- Encana Corp. shareholders are not loving its $5.5 billion all-stock deal to buy Newfield Exploration Co.
Even with the promise of a 25 percent dividend hike and $1.5 billion in buybacks, investors took the stock down as much as 18 percent, the biggest decline since the Calgary-based company began trading in the 1980s.
Encana was downgraded by CIBC on the news. Analysts including Jon Morrison raised issues about “numerous strategic shifts” and questioned Encana's long-term strategy. “We also find the decision to announce an all-stock acquisition concurrent with an increased share buyback as perplexing to say the least.”
Asked about the share reaction on a conference call, Chief Executive Officer Doug Suttles said he hasn't looked at the share price today.
--With assistance from Kevin Orland.
To contact the reporter on this story: Tina Davis in New York at tinadavis@bloomberg.net
To contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net, Joe Carroll, Mike Jeffers
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