COS Urges Rejection of Suncor Bid
CBJ — Canadian Oil Sands is again pleading with its shareholders to reject a hostile takeover offer by Suncor Energy, saying the purchase price is “undervalued” at around $4.5 billion.
The board of COS sent out the following letter.
“Our shareholders are telling us that now is not the time to sell. Not when oil prices are at historic lows,” the letter reads.
The COS board says the company can weather prolonged low oil prices on its own and thrive once crude recovers.
Suncor, which describes its offer as a “premium” for COS shares, says its offer expires on Jan. 8. Based on current stock valuations, Suncor’s offer values COS at about $4.5 billion.
Suncor went over the head of COS’s board and straight to shareholders only after being previously rebuffed by the board with a friendly offer that was worth more on paper.
The Syncrude oilsands project is COS’s largest asset. Both companies are partners in the massive oilsands mine north of Fort McMurray, Alta. — Suncor with 12% and COS with 37%.