CALGARY—The board of Canadian Oil Sands Ltd. has urged shareholders to reject Suncor Energy Inc.’s $4.3 billion takeover bid.
“The value offered for your shares is wholly inadequate; it substantially undervalues the COS ownership in Syncrude,” Donald Lowry, chairman of the company’s board and Arthur Korpach, director and chair of the audit committee, said in a joint letter to shareholders.
COS said the timing of the Suncor bid is “entirely opportunistic” and intends to take advantage of “unprecedented conditions” in the energy industry.
“The bid is exploitive: As an insider to the Syncrude joint venture, Suncor is aware of several cost reduction and value enhancing initiatives being discussed and implemented at Syncrude. Suncor’s offer is attempting to increase its ownership before these initiatives take hold and are recognized and valued by the market,” the letter said.
Lowry and Korpach said the bid fails to recognize the company’s strong position to withstand low oil prices and emerge with “even greater” value when oil prices recover.
Following Suncor’s bid for all outstanding shares of COS earlier this month, the largest player in the Syncrude oilsands site responded with a so-called “poison pill,” instituting changes the company’s shareholder rights.