A recent article in The Globe and Mail discusses the reconciliation between Suncor Energy and Canadian Oil Sands Ltd. (COS); a mending of rocky relations between the two companies following the unexpected launch of Suncor’s hostile takeover bid for COS in October 2015.
After months of deliberating and disputing, and in the face of oil and energy stocks coming under severe pressure, Suncor Energy has garnered support from the COS board and management for a $4.2 billion dollar all-stock take-over deal for the company.
Should the offer be ratified by the February 5th deadline, Suncor will secure a 49 percent stake in the Syncrude oil sands project, operated by Imperial Oil.
The amended deal sees the sweetening of Suncor’s exchange ratio from 0.25 to 0.28, “while lowering the threshold of support needed from the target’s shareholders to 51 per cent”. Two-thirds support from COS shareholders was previously required.
The offer is valued at approximately $4.2-billion, or $8.74 per share, a premium of 17 percent to the COS closing share price on Friday.
Suncor’s original bid was met with resistance, failed to rally enough support from COS shareholders and was eventually rejected, resulting in pressure to augment the offer despite falling oil prices.
The amended offer has been presented amid challenging economic circumstances and COS shareholders are encouraged by parties on both sides of the table to accept the deal. COS chairman Don Lowry said in a statement, “given the current market for energy equities we recommend shareholders tender their shares to Suncor’s improved offer.”
Click here to read the full article in The Globe and Mail.