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Investor vows to vote against Encana moving HQ from Calgary to Denver

A pedestrian walks past The Bow building where Encana Corp. has it's company headquarters in Calgary, Alta., on October 31, 2019. A Canadian investment firm with a four per cent stake in Calgary-based Encana Corp. say it will vote against its plan to move its headquarters to the United States. Montreal-based Letko, Brosseau & Associates Inc. says the planned move to Denver would lead to its removal from the S&P/TSX composite index. THE CANADIAN PRESS/Jeff McIntosh

A Canadian investment management firm with a four per cent stake in Calgary-based Encana Corp. says it will vote against Encana’s plan to move its headquarters to the United States.

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Letko, Brosseau & Associates Inc. says the planned move to Denver would lead to Encana’s removal from S&P/TSX stock indexes.

That would mean investors holding Encana through indexed Canadian funds or with Canadian-only investment policies would have to sell Encana shares, a move the investor says would compound the 70 per cent decline in share price experienced since Sept. 30, 2018.

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Encana recently announced the headquarters move as part of a reorganization that would include changing its name to Ovintiv, as well as a share consolidation.

CEO Doug Suttles, a Texan who lives in Denver, says the change in corporate home is meant to help the company tap into deeper pools of U.S. passive investor capital.

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The changes require a shareholder vote to be held early next year.

“The proposed move is contrary to Encana’s best interests and reflects a profound absence of concern for the protection and enhancement of shareholder value,” charges Letko Brosseau in a statement.

“Further, Encana did not take or even appear to consider any steps to mitigate the adverse consequences to the company or its Canadian investors.”

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