Nova Chemicals Buyout: Good News for Teck Cominco Shareholders?

I, like many other investors, woke up on Monday morning to see that Nova Chemicals (NCX) was purchased or saved by a $6 per share bid. In spite of the fact they had $1.8 billion in debt and that they were running out of time to cover a 100 million dollar debt payment that was coming due in March, International Petroleum ((IPIC)) bought them for a 350% premium to their Friday closing price.

To those who have been longtime shareholders of Nova Chemicals at $20, $30, or $40 dollars, this may have not made their days, but when one is faced to consider the alternative, namely, bankruptcy, this was a huge win for all. The creditors dividing them up for pennies on the dollar, so when shareholders get something back other than a capital loss receipt, this a positive for the shareholders, the market, and Teck Cominco (TCK).