Canadian Oil Sands investor urges shareholders reject Suncor bid
By Nia Williams
CALGARY, Alberta (Reuters) - A major Canadian Oil Sands Ltd investor sent an open letter to fellow shareholders on Tuesday urging them to reject a C$4.3 billion ($3.1 billion) hostile takeover bid by Suncor Energy Inc that expires this Friday.
Seymour Schulich said shareholders should not sell at the current price offered and that he believed Suncor was willing to pay more. Schulich, who could not immediately be reached for comment, reportedly owns about 5 percent of Canadian Oil Sands, which would make him one of its largest investors.
"Suncor is trying to pull a fast one on all of us," Schulich wrote. "Quite simply, they're offering an unacceptable price for an irreplaceable asset."
Last week, the board of Canadian Oil Sands sent a letter to shareholders urging them to reject Suncor's offer because it undervalues the company.
With a 36.7 stake in Syncrude, Canadian Oil Sands is the largest-interest owner in the joint venture Syncrude mining and upgrading project, which has capacity to produce up to 350,000 barrels per day, making it the largest single source of crude production in Canada.
However, the project has been dogged by operating issues. Suncor says that by taking a larger stake in the project it would be able to improve production rates.
Suncor currently owns 12 percent of Syncrude, a stake that would rise to 49 percent if its bid were successful.
In his letter, Schulich argued Syncrude had reduced costs in a low oil price environment and shares in Canadian Oil Sands were well positioned to slingshot higher when the price of oil rebounds. Global crude prices have plunged around 70 percent in 18 months, with U.S. crude last trading at $36 a barrel. Continued...