(Adds details, quote from lawyer)
By John Tilak and Nia Williams
TORONTO/CALGARY, Jan 8 (Reuters) - Suncor Energy Inc , Canada’s largest oil producer, said on Friday it has extended its hostile bid for Canadian Oil Sands Ltd until Jan. 27.
The move suggests that Suncor has close to 50 percent of the votes in support of the deal and is confident it can sway the rest in its favor. Suncor needs the support of two-thirds of Canadian Oil Sands shareholders in order to win 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 defence of its independence, adopting a new shareholder rights plan known as a poison pill and urging investors to reject the “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.
He added that Suncor was in a strong position in this fight.
The takeover battle comes against a backdrop of tumbling global crude prices, which hit 12-year lows this week and left many producers in the oil sands region of northern Alberta struggling to cover cash costs.
Syncrude in northern Alberta is Canada’s largest single source of crude oil and Canadian Oil Sands’ only producing asset, in which it has a 36.7 percent stake.
The upgrading and mining project has capacity to produce up to 350,000 barrels per day but has been dogged for years by operating issues and missed production targets.
Earlier this week, Suncor Chief Executive Steve Williams said he would walk away from the deal if not enough shares are tendered by Friday’s deadline. (Reporting by John Tilak, Nia Williams and Euan Rocha; Editing by Sandra Maler)