Suncor Energy Inc. has formally launched an unsolicited takeover bid for Canadian Oil Sands Ltd. The Calgary-based oil and gas giant said it will look to acquire all outstanding shares of COS for approximately $4.3 billion in stock.
Suncor made a hostile acquisition offer to Canadian Oil Sands for C$4.3 billion.
“In light of this structural change in the market, we believe the current offer represents a full and fair value for COS shareholders and allows them to continue to participate in any potential oil price upside”.
On a morning conference call, Suncor president and chief executive Steve Williams said he approached COS to talk takeover in March and April, but was rebuffed. It has four segments: oil sands, conventional, refining and marketing, and corporate and eliminations. At last check, benchmark Brent crude was up 3.43% at US$49.78/barrel, while copper surged 1.23% to US$2.354/pound.
Canadian Oil Sands is a widely held company, with no shareholder owning more than six per cent of the common shares according to public data compiled by Thomson Reuters.
On the Toronto Stock Exchange, Suncor shares fell 77 cents or 2.18 per cent to $34.56, while COS stock jumped by $3.41, or more than 55 per cent, to end trading worth $9.60.
He said he doesn’t think the other shareholders of Syncrude will bid either. Suncor intends for the Offer to be treated as a reorganization for US federal income tax purposes such that no gain or loss will generally be recognized by USA holders on the disposition of their shares. “By accepting this Offer, COS shareholders will become investors in Canada’s leading integrated energy company with 50 years of experience in oil sands operations and a track record of returning significant value to shareholders”.
Randy Ollenberger, though that is “unlikely” because Suncor has a better chance of being able to lower costs because it has nearby operations.
Lau said she doubts the two Chinese-controlled firms with Syncrude stakes – Sinopec with nine per cent and CNOOC-owned Nexen with seven per cent – would have much of an appetite to grow their share, given Ottawa’s hurdles to foreign state-owned investment in the oilsands.
Suncor in September bought a tenth of the Fort Hills oil sands project in northern Alberta from French oil company Total.
Cnooc Ltd. through its Canadian subsidiary Nexen Energy.