The fight between Canadian Oil Sands and Suncor Energy worsened recently when Suncor sent a letter to shareholders of COS urging these shareholders to accept the takeover bid that the company made. Suncor asked the shareholders to accept the bid for a hostile takeover to the tune of $4.7 billion and to ignore the COS board of directors. The letter states that the current leaders at Canadian Oil Sands have a past of “underperformance, financial challenges, and significant vulnerability in a ‘lower for longer’ oil price market.” Canadian Oil Sands also currently has an estimated amount of outstanding debt that is approximately $2.2 billion. The total estimated value of the takeover transaction is around $6.9 billion according to Suncor. According to a company statement COS shares would see a premium of 57% if the takeover succeeds.

The letter to shareholders of Canadian Oil Sands has not changed the direction that COS has taken. The COS board of directors recently announced that their decision to reject the bid by Suncor was firm, and their statement explained that the bid by Suncor was “undervalued, opportunistic and exploitive.” Steve Williams, the CEO of Suncor, released a statement that said “The COS Board and management are telling COS shareholders to ‘do nothing’ to protect the value of their investment. This would be saying no to the premium value of our offer, and the opportunity for greater upside and lower risk as a Suncor shareholder. Rejecting our Offer represents real risk to COS shareholders, and we urge them to consider the facts and accept our Offer.”