Suncor makes unsolicited $4.3 billion bid for Canadian Oil Sands

Each Canadian Oil Sands shareholder would receive 0.25 of a Suncor share under the deal, representing a 43% premium to Friday’s closing share price, the Wall Street Journal reports.

Suncor Energy (SU – Get Report) stock is slumping 1.71% to $26.40 in pre-market trading on Monday, after making an offer to buy Canadian Oil Sands for roughly C$4.3 billion ($3.3 billion) to increase production in Alberta.

Canadian Oil holds the largest share in the Syncrude project, a massive producer of light, sweet synthetic oil from Canada’s oil sands, which hold combined proven and estimated reserves of 1.6 billion barrels of oil.

“We believe this is a financially compelling opportunity for COS shareholders”, Steve Williams, Suncor’s president and CEO, said. “We’re confident in the value this offer provides to COS shareholders”, he added. Canadian Oil Sands is the largest stakeholder in Syncrude’s operations.

The tender offer for Canadian Oil Sands will be open until December 4 unless extended or withdrawn, the company said.

Gas expert Dan McTeague says the deal was spurred on by falling oil prices.

“We remain convinced that there are significant benefits to a transaction for all interested parties”, he said during a conference call.

Suncor went shopping during the last major crude downturn in 2009, absorbing Petro-Canada in a blockbuster deal.

Suncor slipped 2.3 percent to C$34.57.