Canadian Oil Sands issues 'Declaration of Independence' as takeover rhetoric heats up

CALGARY -- The hostile takeover battle between oilsands giant Suncor Energy and its target, Canadian Oil Sands, could be resolved soon, with both companies revving up their rhetoric ahead of a Friday deadline.

See Full Article

Suncor said Monday that it will move on to other opportunities if, by Friday evening, it does not receive "substantial support" for its $4.3-billion, all-stock offer.

Meanwhile, COS issued what it called a "declaration of independence," reiterating its view that shareholders are better off in the long run if the company continues on in its current form, despite continued weakness in crude prices.

Both companies are partners in the Syncrude oilsands mine north of Fort McMurray, Alta., -- COS with 37 per cent and Suncor with 12 per cent.

COS's main asset is its Syncrude stake, whereas Suncor (TSX:SU) is one of Canada's biggest energy names, with vast operations in the oilsands and a host of other refining and offshore holdings.

Because COS (TSX:COS) is so focused, it's more exposed than most to swings in crude prices -- both on the downside and the upside.

"You invested in Canadian Oil Sands for a pure-play exposure to oil prices and you have held your investment through unprecedented hard times in the energy sector," board chairman Don Lowry said in the public letter to shareholders, which also appeared in full-page newspaper ads.

"Now is the time to secure the future benefits of an independent Canadian Oil Sands."

COS's management and board of directors have slammed the Suncor offer as too low and opportunistic and accused it of fear mongering. Suncor needs at least two-thirds support from COS shareholders for the bid to go through.

In an interview, Suncor CEO Steve Williams said in order to justify keeping up the pursuit, Friday's tender results would need to be "close enough that I have a high degree of confidence the deal will close."

He said the prospects of a sweetened offer are "very low," noting ongoing operational glitches at Syncrude and a deterioration in crude prices since Suncor first took its offer to straight to shareholders in October -- from close to US$50 a barrel then to below US$40 a barrel now.

"If we were going to be making the bid today, it would not be at this level," Williams said.

And although Suncor has been expending a lot of time and effort chasing COS, it has a team screening a wide array of other potential deals, Williams said.

And if Suncor does end up walking away from its offer, the two companies would still have to work together at the Syncrude boardroom table.

"This is not personal. This is a business transaction. I certainly think it will make it a little bit more testing, but as far as Suncor is concerned, we've tried to keep this friendly," said Williams.

"Unfortunately, Canadian Oil Sands didn't want a friendly arrangement. Every time we've been doing anything, we've been requesting Canadian Oil Sands to call us. They've not returned any of those calls. But there's certainly not been any animosity on Suncor's part. . . . We're trying to do the best for Canadian Oil Sands shareholders and Suncor shareholders."



Advertisements

Latest Economic News

  • Competition Bureau wants answers from Sears liquidators on alleged price mark-ups, says report

    Economic CBC News
    The Competition Bureau is investigating allegations that some merchandise was marked up in price for Sears Canada liquidation sales, says a report by the court-appointed monitor for the retailer. Since Sears liquidation sales began, CBC News has heard complaints from several shoppers who found marked-up price tags. Source
  • Don't expect government meddling in the housing market to fix it: Don Pittis

    Economic CBC News
    This week, as the federal Liberals roll out their latest plan to fix housing in Canada, they face a Sisyphean task, one they're unlikely to complete. While the new government strategy makes a welcome political gesture toward solving problems created by the high cost of housing, there is evidence that the problem is bigger, more complicated and more intractable than any government can handle, even with this latest decade-long multi-billion-dollar plan. Source
  • Chief Liberal Party fundraiser tied to $8M loan to offshore trust in Cayman Islands

    Economic CBC News
    Newly discovered documents from the Paradise Papers show the Liberal Party's top fundraiser, Stephen Bronfman, was directly linked to companies that were owed millions by an offshore Cayman Islands trust well into the 2000s — despite his strong denials he had any involvement in the trust after 1998. Source
  • Retailers look to woo shoppers from rivals as Amazon grows

    Economic CTV News
    NEW YORK - Toys and TVs at J.C. Penney, Barbies at Best Buy, kitchen appliances like wine refrigerators at B.J.'s. As the holiday shopping season officially kicks off Thursday, shoppers may find some surprises at their favourite stores. Source
  • Asian stocks flat as support grows for U.S. interest rate hike

    Economic CTV News
    SEOUL, Korea, Republic Of - Asian stock markets were largely flat on Thursday with investors in the U.S. markets going on a Thanksgiving holiday and the Fed minutes largely in line with investor expectations that the Fed will soon raise interest rates for a third time next month. Source
  • First LNG shipment leaves B.C. for China as industry looks to expand exports

    Economic CTV News
    SURREY, B.C. -- FortisBC says it has shipped 950 gigajoules of liquefied natural gas from Vancouver to China, marking the industry's first shipment to the Asian country. The move is part of a pilot project aimed to determine long-term feasibility of B.C. Source
  • U.S. commission alerted to review allegations against TripAdvisor

    Economic CTV News
    BOSTON -- The U.S. Federal Trade Commission could take action against TripAdvisor after the Massachusetts-based travel company was accused of deleting hotel reviews that contained allegations of rape and other crimes. Several people told the Milwaukee Journal Sentinel this month they were sexually assaulted at Mexican hotels and resorts but the online reviews that mentioned the crimes were taken down. Source
  • Trump SoHo to shed 'Trump' amid reports of sagging business

    Economic CTV News
    NEW YORK -- The Trump SoHo hotel is dropping the name it shares with the U.S. president. The Trump Organization said Wednesday that it is ending its licensing deal with the New York hotel amid reports that the property has struggled to attract business. Source
  • Wellsite pipeline leak spills 560 barrels of oil into northern Alberta swamp

    Economic CTV News
    CALGARY - The Alberta Energy Regulator says a pipeline owned by Calgary-based Mount Bastion Oil & Gas Corp. has leaked about 560 barrels of an oil and water mixture at a northern Alberta wellsite. AER spokesman Jordan Fitzgerald says the regulator has staff supervising cleanup by the company at the site about 65 kilometres northwest of Red Earth Creek, which is about 420 kilometres north of Edmonton. Source
  • Wellsite pipeline leak spills 560 barrels of oil emulsion into Alberta swamp

    Economic CTV News
    CALGARY - The Alberta Energy Regulator says a pipeline owned by Calgary-based Mount Bastion Oil & Gas Corp. has leaked about 560 barrels of an oil and water mixture at a northern Alberta wellsite. AER spokesman Jordan Fitzgerald says the regulator has staff supervising cleanup by the company at the site about 65 kilometres northwest of Red Earth Creek, which is about 420 kilometres north of Edmonton. Source