Canadian Oil Sands CEO says buyer interest extends beyond Suncor
By John Tilak and Euan Rocha
TORONTO (Reuters) - Canadian Oil Sands Ltd COS.TO expects strong interest from a wide range of buyers, its chief executive said on Monday, as the company asked shareholders to reject a hostile takeover offer by Suncor Energy Inc (SU.TO: Quote).
After a review, the board concluded Suncor's bid was weak and substantially undervalued the company's ownership in Syncrude, the country's biggest synthetic crude project.
Canadian Oil Sands is the largest shareholder in Syncrude, with a 37 percent stake. Suncor owns a 12 percent interest.
"The offer they put in front of us is substantially inadequate. It substantially undervalues the asset," Chief Executive Ryan Kubik told Reuters.
He said the asset is unique and the company was open to a potential merger, joint venture or sale.
"There's interest from a broad range of buyers," Kubik said. "Whether it be private equity, whether it be pension funds, or international oil companies. There aren't too many places in the world where you can go get 1.6 billion barrels of reserves and clear visibility on it."
He declined to comment on whether the company has held discussions with any other parties, saying the focus has so far been on reviewing the Suncor offer. Kubik added the company would be willing to engage with any party willing to come forward with a full and fair offer. Suncor shares fell about 1.6 percent and Canadian Oil Sands shares slipped 1.8 percent on the Toronto Stock Exchange.
Suncor Chief Executive Steve Williams explained the offer reflected a new business reality. "It also represents an opportunity for investment in a financially stronger, more diversified and stable company that has considerable upside potential in a rising price environment," he said in a statement. Continued...