Canadian Oil Sands seems poised to reject Suncor offer, will rewrite shareholder rights
by Canadian Manufacturing.com Staff
Suncor's current offer is for "substantially less" than an offer rejected by the board as inadequate in April
CALGARY—Suncor Energy Inc.’s unsolicited, $4.3 billion takeover offer is causing changes at Canadian Oil Sands Ltd. The Calgary-based company will rewrite its shareholder rights plan in response to what it called an “opportunistic” offer. Meanwhile, it seems poised to reject the takeover bid.
“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,” Donald Lowry, chairman of the company’s board, said.
COS said Suncor’s current offer for all outstanding shares of the company is not the first time the Canadian energy giant has approached the largest stakeholder in northern Alberta’s Syncrude oilsands development since the price of crude began to slide more than a year ago. The company said Suncor first approached COS with “a letter that contained no offer and provided no basis for further discussions” in March.
In April, the company’s board then received a non-binding expression of interest, which was unanimously rejected. The company noted this rejected offer was for substantially more than Suncor’s current Oct. 5 takeover bid.
Under the company’s new Shareholder Rights Plan, which COS says is designed to ensure the company’s board and its shareholders have adequate time to consider any offers, potential buyers would be required to ensure bids remain active for at least 120 days.
“Because Suncor’s offer is open for acceptance only until December 4, 2015 (unless extended or withdrawn by Suncor), it would not be a Permitted Bid under the New Rights Plan,” COS said.
Meanwhile, COS’ board as well as its advisors have began evaluating the Suncor offer. The company again urged shareholders to not take any action until the board makes a formal recommendation.
