UPDATE 5-Suncor reaches deal to buy Canadian Oil Sands with sweetened offer
(Adds comments from CIBC fund manager)
By Amrutha Gayathri and John Tilak
Jan 18 (Reuters) - Canada's largest oil producer Suncor Energy Inc has reached a deal to acquire rival Canadian Oil Sands Ltd on Monday by raising its all-stock offer, a move seen marking the end of a months-long battle for the synthetic crude asset.
The deal, valued at about C$4.24 billion ($2.93 billion), came days after Suncor's hostile bid fell short of support from Canadian Oil Sands shareholders.
Canadian Oil Sands' shares rose about 11 percent, while Suncor fell 4.7 percent.
Oil sands producers have been struggling with tumbling global crude oil prices, which have slid to their lowest levels since 2003 over worries of a global supply glut.
Suncor will now offer Canadian Oil Sands shareholders 0.28 of a Suncor share for each share held, up from the initial bid of 0.25 shares. The new offer values Canadian Oil Sands at C$8.74 per share, a premium of nearly 17 percent over the closing price of both stocks on Friday.
In response to the hostile bid, Canadian Oil Sands had adopted a shareholder rights plan that acted as a poison pill, and urged investors to reject the offer.
Seymour Schulich, a major Canadian Oil Sands investor who had opposed the initial bid, said he was satisfied with the outcome. Continued...