Northey, Rodney V.
Gowling Lafleur
Henderson LLP
(416) 369-6666
rodney.northey@gowlings.com
Mr. Northey is author of
a new guide for project
developers in the energy,
resource and transportation
sectors who are subject to
federal environmental
assessment.Also involved
in the development of regu-
latory strategies for
complex projects.
O'Callaghan, Peter J.
Blake, Cassels
& Graydon LLP
(604) 631-3345
peter.ocallaghan@blakes.com
Mr. O'Callaghan's practice
focuses on corporate finance
and M&A transactions
in the mining sector. Rec-
ognized in, among others,
the Lexpert®/American Law-
yer Guide to the Leading 500
Lawyers in Canada and e
Best Lawyers in Canada.
Olthafer, Lars
Blake, Cassels
& Graydon LLP
(403) 260-9633
lars.olthafer@blakes.com
Mr. Olthafer advises on regu-
latory and environmental
approvals and compliance,
public and Aboriginal
consultation, and land rights
acquisition and compensa-
tion for both provincially and
federally regulated energy
production and
transmission projects.
O'Callaghan, Kevin
Fasken Martineau
DuMoulin LLP
(604) 631-4839
kocallaghan@fasken.com
Mr. O'Callaghan provides
strategic advice to oil and gas,
energy and mining clients
on Aboriginal, regulatory,
environmental assessment
and other CSR issues. He has
appeared before courts and
tribunals on license challen-
ges and environmental issues.
O'Leary, Dean A.
Farris, Vaughan,
Wills & Murphy LLP
(604) 661-9316
doleary@farris.com
Mr. O'Leary's practice
focuses on commercial
transactions in a variety of
industry sectors including
energy and infrastructure.
His experience includes
reorganizations, acquisitions
and divestitures, power
project developments
and expropriations.
Olynyk, John M.
Lawson Lundell LLP
(403) 781-9472
jolynyk@lawsonlundell.com
Mr. Olynyk advises oil sands
developers, conventional oil
and gas companies, railways,
mining companies, utilities
and other public- and private-
sector clients across Canada
on Aboriginal, environ-
mental, regulatory and natural
resources matters.
36
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M&A ISSUES
LEXPERT
®
RANKED LAWYERS
with Talisman's North Sea business, which
has challenges. ey faced falling produc-
tion from mature fields and large decom-
missioning liabilities. By mid-2014, the
bottom line was that Repsol was unwilling
to take on those challenges at the prices be-
ing discussed.
Johnson: Repsol initially had some dif-
ficulty getting comfortable with some of
Talisman's assets, which led to the initial
breakdown in the summer.
Spencer: Eventually, with the benefit of
more time to understand the business – and
a $5-billion-lower transaction price – a deal
could be done.
Johnson: e combination of the two
companies was too compelling to resist.
Lexpert: Some of the shareholders didn't
feel that way, though. Carl Icahn's group
stood to lose a lot of money on his invest-
ment in Talisman. He was no doubt trying
to scuttle the deal.
Johnson: At the outset there was uncer-
tainty as to whether Icahn would oppose
the transaction, and that was a concern.
Talisman knew that Icahn would not
agree to a lock-up, so there was the poten-
tial to be in the highly unusual situation,
at least in Canada, of having a proxy fight
over an M&A transaction, if Icahn didn't
like the deal.
Spencer: Repsol was not willing to proceed
with anything less than full support of man-
agement and the Talisman board. So we le
it to Talisman to dialogue with the Icahn
group and had no direct contact ourselves.
Johnson: I can't disclose any specifics on
how the situation was managed, but in the
end Icahn voted in favour of the transaction,
which is a testament to the great job that the
Talisman team did in a difficult situation.
Lexpert: Of course, then you had the ulti-
mate collapse in oil prices by the end of the
year. Was there concern that the downward
spiral would kill the deal? Or did the col-
lapse light a fire under the teams?
Johnson: By the fall I was concerned about
the impact of the drop in oil prices on Talis-
man's prospects for doing any transaction.
Aer Repsol made its November proposal,
I thought the continuing drop had the
potential to derail the deal, since it caused
Talisman's share price to continue to drop
and increased the premium of the proposed
price over the trading price.
Spencer: Actually, I don't think the deal
would have happened if the price of oil did
not fall. e lower price emboldened Rep-
sol and, I suspect, put Talisman in a position
where other options were no longer feasible.
Johnson: e drop increased the impor-
tance to Talisman of doing the deal, but it
didn't result in any renegotiations from the
time the proposal was made to the time the
definitive agreement was signed.
Lexpert: In any event, a deal was ultimately
struck that was worth $16.5 billion — cer-
tainly one of the biggest deals of the year.
Was it a memorable one?
Spencer: It was difficult and complex, and
took nearly a year from start to finish. Wit-
nessing the negotiations as oil prices fell
was interesting. Investment Canada was
also a more difficult process than it is nor-
mally. Business circumstances were forcing
a reduction in the Talisman head count and
capital commitments could not be made
lightly. What makes the deal memorable,
however, is the people. I both made new
friends, such as Repsol lawyers Miguel Klin-
genberg and Pablo Blanco in Madrid, and
worked with old friends here in Calgary.
Johnson: Absolutely this was a memorable
deal. Any large, complex or precedent-set-
ting transaction is exciting to be involved
with. is deal was special for me due to my
long history with Talisman and the great
working relationship we had with the Tal-
isman team. e people on the Repsol and
Bennett Jones teams were also very enjoy-
able to work with and I thought that our
two firms worked particularly well with
each other.
