TSX bounces higher on Suncor bid for Canadian Oil Sands
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index jumped on Monday, as shares of Canadian Oil Sands COS.TO surged 55 percent on a hostile bid by Suncor Energy Inc (SU.TO: Quote), its rival and co-producer in the country's oil sands industry.
The Alberta oil sands are a leading source of U.S. crude imports, but slumping oil prices have squeezed producers in a region whose operating costs are among the world's highest.
"For a company with as strong a balance sheet as Suncor it's a good move to go after assets like that," said Bryden Teich, associate portfolio manager at Avenue Investment Management, a long-time Suncor shareholder.
He said the bid has a strong chance of succeeding, and that Imperial Oil (IMO.TO: Quote) may also take a look. A source familiar with the matter has said Canadian Oil Sands will reject the bid.
The rise in Canadian Oil Sands helped drive up the overall energy group 4.5 percent. Canadian Oil Sands shares ended at C$9.60, topping the value of the all-stock offer of C$8.84 a share.
Penn West Petroleum PWT.TO and Meg Energy Corp (MEG.TO: Quote), both the subject of persistent speculation they could be acquisition targets, also gained. Penn West rose 22.4 percent at C$1.04 while MEG rose 21.8 percent to C$10.11.
Suncor slipped 2.2 percent to C$34.60.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 212.46 points, or 1.59 percent, at 13,552.20, in a broad rally that left only 19 out of 242 stocks in the red. Continued...