OFFER FOR DOME MAY SHORT-CIRCUIT ITS DEBT TALKS
A 3.22 billion dlr offer for Dome
Petroleum Ltd <DMP.MO> by TransCanada Pipelines Ltd <TRP.TO>
may short-circuit Dome's restructuring plan and open the door
for more takeover bids, oil analysts said.
    Dome is trying to get approval for a plan to refinance debt
of more than 4.5 billion dlrs by July 1, 1987, when an interim
debt plan that allowed the Canadian oil and gas firm to defer
substantial payments to creditors will expire.
    Analysts said TransCanada's bid signals Dome's debtholders
that an alternative exists to Dome's debt plan.
    Dome announced its plan to 56 major creditors as well as
public noteholders in March after several months of delicate
negotiations.
    TransCanada's proposal "amounts to a quasi debt
restructuring," oil analyst Doug Gowland of Brown Baldwin Nisker
Ltd said from Toronto.
    Calgary-based Dome's restructuring plan would allow
creditors to convert debt to common shares under a formula yet
to be negotiated. Payments on remaining debt would be linked to
cash flow generated by assets pledged against the debt.
    "The weakness of the whole debt-refinancing proposal is that
even with approval of creditors, there is no assurance that
Dome will in fact be able to repay all of its debt obligations,"
said Wilf Gobert, an oil analyst for Peters and Co Ltd in
Calgary.
    TransCanada's announcement came as a surprise since Dome
was waiting for responses from creditors on its proposed
refinancing packages, Gobert said.
    The TransCanada proposal could open the bidding for Dome
since other potential buyers were probably waiting for lenders
to agree to a restructuring, he added.
    "I would think that the debtholders would want to entertain
any and all offers (for Dome)," Gobert said.
    Dome spokesman David Annesley said in New York that
TransCanada's announcement could be seen as an attempt to fix
the bidding price for Dome and an effort to preclude other
possible buyers from making an offer. "By drawing attention to
us in our discussions, it means that others may be a little
reluctant to come forward," he said.
    Dome does not consider TransCanada's proposal a formal
offer because the pipeline utility's announcement breached a
confidential agreement between the two companies, he said.
    Dome responded to the statement by suspending discussions
with TransCanada in order to pursue talks with other
unidentified parties. However, Dome said its management and
financial advisers would evaluate all proposals, including
TransCanada's.
    Gowland said TransCanada's offer is probably a fair price
for the company's 36.1 mln acres of oil and gas land holdings.
    However, he said not enough financial details are known
about Dome's debt restructuring to compare the value of
TransCanada's proposed offer.
 REUTER
