TORONTO (miningweekly.com) – Canadian oil sands miner Suncor Energy has extended its hostile takeover bid for Canadian Oil Sands (COS) until January 27, encouraging COS shareholder interest in the acrimonious proposition.
"We are encouraged by the number of shares that have been tendered," stated Suncor president and CEO Steve Williams on Monday morning.
“We believe strongly in the value of the offer for COS shareholders, including a large premium to the pre-offer price, a 45% dividend increase and the benefit of owning shares in Suncor, Canada's leading integrated energy company. We have decided to extend the offer in order to allow shareholders to continue to tender to the offer."
Under the terms of the offer, valued at about C$4.3-billion, each COS shareholder would receive one-quarter of a Suncor share for each share tendered. The deal required the support of two-thirds of COS shareholders.
COS held a 36.74% stake in Syncrude, its main asset and one of the largest oil sands operations north of Fort McMurray, while Suncor owned 12%.
COS had vigorously defended its position, stating that the Suncor bid was inadequate, opportunistic and exploitive and that it failed to recognise that COS was in a strong position to withstand low oil prices – with superior leverage to prices and the ability to emerge with even greater value when they recover.
Williams has previously voiced his strong disagreement with COS management, pointing to the long-term consensus that the price for West Texas Intermediate crude was not expected to rise above $55/bl until 2020, making it harder for COS to reverse recent dividend cuts in favour of paying back $1-billion in debt.
He argued that, should the offer lapse, it could cause a downfall in COS’s stock price to well below its pre-offer price.
Edited by: Samantha Herbst
Creamer Media Deputy Editor
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