The Work

March 8, 2011 5:34 PM

Canadian Firms Tackle Trio of Natural Resource Deals

Posted by Brian Baxter

At least five leading Canadian law firms landed key outside advisory roles on three major transactions announced this week in the hot energy and mining sector.

Talisman Energy announced on Tuesday that it sold a 50 percent stake in natural gas assets located in British Columbia's Montney Shale basin to South Africa's Sasol for $1 billion. The New York Times reports the transaction is the second between the two companies in three months. In December, Talisman sold half of its stake in British Columbia's Farrell Creek shale to Sasol for $1 billion.

Fraser Milner Casgrain is advising Johannesburg-based Sasol on its latest deal with Talisman. Fraser Milner wasn't able to immediately provide the names of its lawyers working on the transaction. The firm advised Sasol on its December deal with Talisman. Sasol's internal legal director is Nereus Joubert.

A spokesman for Calgary-based Talisman did not respond to a request for comment on its outside counsel. Former Bennett Jones partner Robert Rooney serves as general counsel for Talisman, which is Canada's largest independent oil and gas exploration company.

On Monday, India's Tata Steel announced that it reached an agreement with Canadian mining company New Millennium Capital (NMC) to jointly develop iron ore deposits in Labrador and Quebec, according to The Canadian Press. The potential value of the deal is $4.9 billion, as global steel producers join the rush to get a piece of Canada's abundant mineral wealth. But The Wall Street Journal reports that NMC and Tata Steel don't stand to reap quick gains from the accord.

Stikeman Elliott corporate partners Dee Rajpal and associate Colin Yao in Toronto are advising Tata Steel on its joint venture agreement. The firm previously advised the Mumbai-based company, India's largest in the steel industry, on its acquisition of an interest in NMC.

A spokesman for Calgary-based NMC did not respond to a request for the company's outside counsel. Roy Hudson, a corporate partner focused on oil and gas and energy work in the Calgary office of Davis LLP, serves as member of NMC's board. Bennett Jones counsel A. Anne McLellan, a former member of Canada's parliament, is a strategic adviser to NMC.

The Canadian Press also reported on Monday that Vancouver-based Magma Energy would acquire clean energy company Plutonic Power in an all-stock deal worth about $195 million. Magma will change its name to Alterra Power after acquiring Plutonic. The agreement calls for Magma shareholders to own 66 percent of Alterra, according to The Canadian Press, while Plutonic shareholders will own 34 percent.

Borden Ladner Gervais is advising Magma on the transaction. The firm previously advised Magma, a geothermal power provider, on an IPO in June 2009 that raised nearly $90 million. Another longtime firm client is Vancouver-based exploration and mining company Pan American Silver, whose chairman, Ross Beaty, serves as Magma's CEO. Pan American's general counsel, Robert Pirooz, also sits on Magma's board. Magma's general counsel is Lyle Braaten.

Miller Thomson is advising Plutonic on the deal, while a special committee of the Vancouver-based company's board is being counseled by Fasken Martineau DuMoulin M&A partner Blair Horn, corporate partners Frank Schober and Georald Ingborg, and litigation partner Tracey Cohen. R. Stuart "Tookie" Angus, a former partner and head of the global mining group at Fasken, is a member of Plutonic's board. Former Miller Thomson partner Rupert Legge serves as Plutonic's executive vice president of corporate and legal affairs.

Completion of the merger between Magma and Plutonic is contingent on the approval of shareholders of both companies at special meetings scheduled for late April. The deal also requires regulatory, stock, and court approvals, according to a statement by Plutonic.

As we reported late last year, the Canadian legal market was shaken up as a result of the spate of natural resource deals that caused some firms to pursue mergers with rivals and tie-ups with smaller shops. On Monday we reported on two foreign firms eyeing a foothold in Canada, at least one of which was drawn by the country's growing importance in global energy markets.

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