Suncor Energy (NYSE:SU) says it has offered to acquire all outstanding shares of Canadian Oil Sands (OTCQX:COSWF) for ~C$4.3B ($3.3B), a 43% premium over Friday’s closing price.
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Suncor’s takeover move comes amid consolidation in the oil sands industry in western Canada, hammered by the fall in oil prices.
The push higher in Canadian Oil Sands stock – to C$9.06, higher than the all-stock offer value of C$8.84 a share – carried the overall energy group up 2.8 percent.
“We believe this is a financially compelling opportunity for COS shareholders”, said Steve Williams, Suncor’s president and chief executive officer.
Canadian Oil Sands is the largest partner in northern Alberta’s Syncrude oil sands development.
Calgary-based Suncor said on Monday the offer to COS shareholders is for 0.25 of a Suncor share per COS share.
Alberta’s oil sands are the world’s third-largest crude reserves after Saudi Arabia and Venezuela and a leading source of USA crude imports.
Requests for comment from a Canadian Oil Sands spokesperson outside business hours weren’t immediately returned.
Suncor in September bought a tenth of the Fort Hills oil sands project in northern Alberta from French oil company Total.
Williams said the value of Canadian Oil Sands has declined since the original offer due to deteriorating market conditions.
The offer will be open for acceptance until 5:00 p.m. on December 4, 2015. He expects lower oil prices for several years.
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Suncor said COS shareholders “would be positioned to benefit from Suncor’s integrated model and ongoing production growth, and continue to participate in any oil price recovery”.
