Canadian Oil Sands Rejects Suncor Bid, Needing More Timeby and
Offer from Suncor not a 'permitted' bid under new rights plan
Suncor made C$4.3 billion unsolicited offer on Oct. 5
Canadian Oil Sands Ltd. rejected Suncor Energy Inc.’s C$4.3 billion ($3.3 billion) unsolicited offer to buy all of its outstanding shares, citing a need for more time to evaluate it.
The company today announced a new shareholder rights plan, which calls for 120 days to consider bids. "Because Suncor’s offer is open for acceptance only until December 4, 2015 (unless extended or withdrawn by Suncor), it would not be a Permitted Bid under the New Rights Plan," Canadian Oil Sands said in a statement.
The plan is designed “to ensure that Canadian Oil Sands’ shareholders have adequate time to consider and evaluate Suncor’s offer and any other unsolicited take-over bid or other strategic alternatives,” the statement showed.
Canadian Oil Sands said the offer announced this week is substantially less than a proposal rejected by the board in April 2015. Suncor expected Canadian Oil Sands to reject its hostile takeover, Chief Executive Officer Steve Williams said said in an interview at Bloomberg headquarters in New York on Tuesday.
The price of 0.25 Suncor shares for each in Canadian Oil Sands was “a little light,” according to one of the target company’s largest shareholders.
Suncor, Canada’s largest crude producer, is taking advantage of a prolonged oil rout to renew its effort to take over the biggest shareholder of the Syncrude venture in northern Alberta after two friendly offers were turned down earlier this year.
Shares of Canadian Oil Sands surged as much as 58 percent in Toronto on Monday, the day the bid was announced, before paring the price surge the next day. The stock fell to C$9.01 in pre-market trading at 8:23 a.m. Wednesday.