Suncor raises bid for Canadian Oil Sands, gets $6.6-billion deal

Under the revised terms of the offer, shareholders in the latter were set to receive 0.28 shares in Suncor in exchange for each one held in COS, up from 0.25 shares beforehand, valuing the company at CAD$6.6bn (£13.66bn) once its debt load of CAD$2.4bn was accounted for.

The new offer values Canadian Oil Sands at C$8.74 per share, a premium of almost 17 percent over the closing price of both stocks on Friday.

“You can assume that you can bring in better reliability”.

But, in light of worsening market conditions, it likely decided negotiating a higher bid was a better option, said Samir Kayande, an analyst at RS Energy Group. Finally, Scotiabank reiterated a “neutral” rating and issued a $9.40 target price (down from $9.70) on shares of Canadian Oil Sands Com Npv in a research note on Thursday, December 3rd. “We approached the COS Board and they agreed”.

Back on October 5, 2015, Suncor announced a takeover bid of Canadian Oil Sands Ltd., the largest partner in Syncrude’s mine in northern Alberta. “It’s going to cause some real pencil sharpening for Imperial and Exxon”, said Schulz.

The parties began hammering out a deal last week without Suncor’s chief executive officer, Steve Williams, who was said to be entrenched in his position of not raising the bid especially under the backdrop of falling oil prices, the people said. The Amended Offer will include an extension of the expiry time which is now anticipated to be extended to 4:00 p.m. (MT) on February 5, 2016. It has also lowered the threshold for the deal so now only needs the support of 51 per cent of shareholders, down from two-thirds.

Can we expect more consolidation in the oil patch?

Low oil prices have pushed down stock prices across the board, creating some great buying opportunities in the energy sector. “Our shareholders clearly signaled they expected more for their COS shares, and the Board has worked to secure that under very challenging circumstances”.

“I think that, in a down market, M&A tends to be driven by liquidity concerns. And so that’s going to be the discipline that actually gets the sellers to the table”, said Kayande.