COS takeover bid deadline extended by Suncor Energy till Jan 8th 2016
Suncor Energy, Canada's largest crude-oil producer, extended its hostile all-stock takeover bid to shareholders of smaller exploration company Canadian Oil Sands Limited (COS) till January 8, 2016, with no change.
The all-stock offer launched on October 5th worth nearly USD 4.5-billion based on Thursday's closing share price was to have expired Friday.
Mr Steve Williams, Suncor's president and chief executive officer, said that "Our offer is full and fair and in the best interests of COS shareholders. This process has always been about allowing COS shareholders to decide for themselves on the merits of our offer. The good news is that they will finally have their say."
Since Suncor first expressed interest in acquiring COS, the oil market outlook has worsened. Further, COS has reported negative free cash flow for the first nine months of 2015. Though it recently projected an optimistic production outlook for 2016, the COS track record of overpromising and under-delivering goes against it.
In view of the worsening outlook for oil prices, Mr Williams said the pressure is clearly on COS' board and management to prove they are acting in someone's interest other than their own.
The Alberta Securities Commission earlier this week allowed COS to keep its new shareholder rights plan, also known as a poison pill, in place until Jan. 4. Suncor had sought to have the poison pill overturned, while COS wanted to keep it until early February.
He said that "The Alberta Securities Commission decision allows COS more time to surface a superior offer from a credible third party, something most analysts see as unlikely. They are now focused on a self-serving claim that COS, despite a balance sheet with a near junk credit profile, is better off as an independent company in a lower for longer crude oil price environment."
A COS adviser claimed that 25 parties have expressed some degree of interest, but the company has also argued that it's in strong enough shape to keep going it alone.
Source : russianews.net