UPDATE 2-Canadian Oil Sands adopts poison pill to fend off Suncor

Wed Oct 7, 2015 1:30pm EDT
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(Updates with Suncor comment)

By Nia Williams

CALGARY Oct 7 (Reuters) - Canadian Oil Sands Ltd on Wednesday announced a new poison pill to try to thwart Suncor Energy Inc's hostile takeover bid, setting the stage for a drawn-out battle that could reshape Alberta's high-cost oil sands industry.

Canadian Oil Sands said its board had implemented the poison pill, or shareholder rights plan, in addition to an existing one to give investors enough time to weigh up Suncor's offer or other takeover bids or strategic alternatives that might arise.

Suncor, Canada's largest oil producer, made an unsolicited all-stock offer to acquire Canadian Oil Sands on Monday, valuing it at about C$4.3 billion (3.29 billion). A successful deal would give Suncor control of nearly half of the Syncrude oil sands project, Canada's largest single-source producer of synthetic oil.

Shares of both companies were up more than 1 percent on Wednesday.

"The board will consider Suncor's unsolicited offer in both the current context and in light of the strong long-term potential of Canadian Oil Sands," Chairman Donald Lowry said in a statement.

Suncor said it was disappointed but not surprised by Canadian Oil Sands' decision to adopt a new shareholder rights plan in response to its offer.

"This inappropriate defensive tactic limits the ability of COS shareholders to decide," Suncor Chief Executive Steve Williams said.   Continued...