Suncor extends bid for Canadian Oil Sands until Jan. 27
By John Tilak and Nia Williams
TORONTO/CALGARY (Reuters) - Suncor Energy Inc (SU.TO: Quote), Canada's largest oil producer, said on Friday it had extended its hostile bid for Canadian Oil Sands Ltd COS.TO until Jan. 27.
Suncor needs to secure at least two-thirds support from shareholders to succeed in the bid, which comes against a backdrop of tumbling global crude oil prices that slid to a 12-year low this week. <O/R>
Many producers in the oil sands region of northern Alberta are struggling to cover cash costs.
In a statement on Friday, Canadian Oil Sands said it wanted its shareholders to take no action on Suncor's bid, reiterating its view that it is undervalued by the bid.
Suncor bid for Canadian Oil Sands in October and later extended the offer until Jan. 8, promising shareholders improved operating efficiencies and a dividend boost.
In response, Canadian Oil Sands has mounted a spirited defense of its independence, adopting a new shareholder rights plan that would act as a poison pill and urging investors to reject what it called a substantially undervalued Suncor bid.
No alternate bidder surfaced for Canadian Oil Sands during this time.
"When no competitor emerges, which is the case here, bidders have won two-thirds of the time," said Fasken Martineau partner Bradley Freelan, referring to a study on hostile bids that he co-authored. Continued...