Tag: Canadian Oil Sands

Categories
Alberta Economic Ft Mac

Close to 73% of Canadian Oil Sands Shares have Been Acquired by Suncor

Suncor has made an announcement that the company has acquired almost 73% of the Canadian Oil Sands shares, giving Suncor the accompanying rights that the energy company has been seeking n the last few months. After trying to acquire COS shares with two separate offers Suncor made a hostile takeover bid for Canadian Oil Sands. This led to months of disagreements and negative statements on both sides. Suncor needed to have two thirds of the COS stock tendered by shareholders in order to be successful in their goal, otherwise the offer worth $4.3 billion would fall through. A Friday announcement alerted the public that Suncor will have the ability t acquire the rest of the COS shares needed and ensure the acquisition transaction goes as planned.

In January Canadian Oil Sands accepted the takeover offer made by Suncor, and management approval was secured. Originally Suncor was offering COS shareholders an exchange of 1 COS share for 0.25 Suncor share. This offer was increased to 0.28 share of Suncor stock for every share of COS stock. This is good news for stockholders who offered their shares. Suncor president and CEO Steve Williams gave a statement that read in part “We’re pleased with the strong level of support from COS shareholders. From the outset, we’ve spoken about the excellent value this offer creates for both COS and Suncor shareholders and I’m looking forward to delivering on that commitment.” With the low oil prices and recent cuts made by almost every company in the energy sector the acquisition could be good news for everyone involved.

Categories
Alberta Economic Ft Mac

Shareholders Urged by Canadian Oil Sands to Reject the Suncor Hostile Takeover Bid Offer

Suncor takeover bid offer, Canadian Oil Sands

COS shareholders are being urged by Canadian Oil Sands to reject the recent Suncor hostile takeover bid, while Suncor is encouraging these same shareholders to take the offer in order to protect the value of the stock that they hold. COS is arguing that the offer, set at $4.5 million, is undervalued and that shareholders would be smart to say no. A letter sent to shareholders from COS, signed by Donald Lowry who is the board chairman and by board member Arthur Korpach, stated “Our shareholders are telling us that now is not the time to sell. Not when COS has just completed major projects that secure low-cost production for decades and particularly not when COS is poised to benefit far more than Suncor from an eventual oil price recovery. Our shareholders want us to capture the upside of their COS investment, not lock-in the downside. Our shareholders are telling Suncor the same thing.”

The letter from Canadian Oil Sands about the Suncor takeover bid offer continued by stating “Suncor disparages Syncrude. So why does it want to own more of it? Because it knows Syncrude is a scarce, valuable asset.” The takeover offer ends on January 8, 2016, and in the letter COS says that Suncor is fear-mongering. Suncor says that their offer includes a premium for the COS shareholders, whiile CO says this is far from true. The arguments and heated words between company executives have been intense since the hostile takeover bid was announced. According to Steve Williams, the CEO for Suncor, “By tendering to our offer, you will receive a significant premium to the pre-offer value of your COS shares (today valued at 40%)(1) and an immediate dividend increase of 45% above what you get today from COS.”

Categories
Alberta Economic Ft Mac

The Suncor Takeover Bid for Canadian Oil Sands has been Extended in Spite of Previous Announcements to the Contrary

Suncor takeover bid, Canadian Oil Sands

In recent weeks the Suncor takeover bid for Canadian Oil Sands has been the topic of much discussion and many conversations. When COS initiated a so called poison pill amendment and asked for more time to consider the options Suncor publicly stated that their bid would end on the indicated date. When the Alberta Securities Commission granted Canadian Oil Sands the extension that was requested Suncor extended their bid until the new date of January 8, 2016 despite their previous comments to the contrary. According to a statement from Suncor president and CEO Steve Williams “This process has always been about allowing COS shareholders to decide for themselves on the merits of our offer. The good news is that they will finally have their say.”

After the decision by the ASC on the COS request and the Suncor takeover bid Williams stated “The Alberta Securities Commission decision allows COS more time to surface a superior offer from a credible third party, something most analysts see as unlikely. They are now focused on a self-serving claim that COS, despite a balance sheet with a near junk credit profile, is better off as an independent company in a lower for longer crude oil price environment.” While Suncor has extended the deadline for the id the company is not increasing the original offer because they believe the offer was fair with oil prices still on the decline. Suncor also described the negative free cash flow that COS has reported so far this year.

Categories
Alberta Economic Ft Mac

Letter to Shareholders of Canadian Oil Sands Urges Takeover Bid Acceptance

Canadian Oil Sands, letter to shareholders

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.”

Categories
Alberta Economic

Takeover Bid by Suncor Rejected by Canadian Oil Sands

Suncor, Canadian Oil Sands

A recent takeover bid by Suncor for Canadian Oil Sands has been rejected, with Canadian arguing that more time is needed so the company can examine and evaluate all of their options. Suncor made an unsolicited takeover offer in the amount of $4.3 billion, but the attempt was one that was not welcome or wanted by Canadian. Last Wednesday Canadian Oil Sands made an announcement about a shareholder rights plan which would be designed so that board members and shareholders had sufficient time to go over all of the possible options. Other companies have also made offers, some of which propose mergers with Canadian Oil Sands instead of an outright takeover of the company. According to the plan the company shareholders will have a minimum of 120 days to review any offers. The plan will go into effect if 20% or more of the company shares are obtained or there are efforts to acquire at least 20% of the company stock.

Canadian Oil Sands released a statement arguing that a previous offer was higher than the current takeover bid amount. The board chairman for Canadian Oil Sands, Donald Lowry, said “The Board will consider Suncor’s unsolicited offer in both the current context and in light of the strong long-term potential of Canadian Oil Sands. Shareholders do not need to take any action or make any decision about the Suncor offer until the board has had an opportunity to fully review the offer and to provide a recommendation based on careful analysis.”