Why Total Wants to Buy UTS ?

French energy giant Total recently put forward an offer to Canadian company UTS for a whopping 616 Canadian Dollars. The offer was rejected !

Total has now come back with a vengeance and placed yet another bid which is 35% more than its original bid. The new bid; 829.8 million Canadian Dollars. The offer; Rejected again !

Total is an energy giant with assets worth billions of dollars spread throughout the globe. For Total, acquiring a company such as UTS in the Canadian oil patch is not only strategic but also a sound decision to increase its asset base.

UTS is not a black sheep nor a company that's in trouble. The company is an active participant in the Canadian oil sector. UTS owns 20% of the Fort Hills project in Alberta, which is one of the biggest multi-billion dollar investment projects presently underway in the Canadian west.

The rejection of offers by UTS is a clear sign that the company is worth much more than what Total has offered. For UTS this means a better stock outlook and also some kind of increase in stock value over the coming months. For Total is a test of what money can buy.

What needs to be seen in the coming months is if Total increases their bid value further or withdraw from the acquisition. Either way, investors at UTS are likely to benefit from the event.