As of November 19, “four highly credible parties have executed confidentiality agreements” with Canadian Oil Sands for access to nonpublic information in preparation for possible bids, RBC Capital Markets Deputy Chairman R. Jamie Anderson said in an affidavit filed in support of Canadian Oil Sands. It raised the possibility of walking away from its stock-based offer of 0.25 Suncor shares per Canadian Oil Sands share if the regulator sides with COS and upholds the poison pill.
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Suncor, Canada’s biggest oil company, has asked the Alberta Securities Commission to strike down the so-called poison-pill adopted by Canadian Oil Sands’ last month that would give it 120 days to weigh other offers.
After Wednesday’s close, Oil Sands shares were at $8.90, within a 52-week trading range of $5.61 to $17.10, while Suncor closed Wednesday at $36.60, within a 52-week trading range of $30.89 to $40.93.
The Alberta Securities Commission will hear arguments today into whether Canadian Oil Sands should be allowed to keep its defence against hostile takeovers. Suncor’s offer expires December 4.
Two of the sources said parties that have shown some interest include Blackstone Group and KKR & Co LP, with others in the mix including the Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan.
“I firmly believe that with more time to run our process, there is a good prospect for one or more counter parties to make a proposal”, Anderson said in his affidavit.
If Suncor were to withdraw its offer, Harrison warned that Canadian Oil Sands shares might fall to pre-offer prices or below.
“It is also notable that only one party has participated in, or indicated and interest in participating in, a management presentation”.
Suncor Energy took a $4.5-billion all-stock offer directly to shareholders on October 5 after attempts at inking a friendly deal were rebuffed by COS leadership in the spring.
Canadian Oil Sands Ltd – Receive News & Ratings Via Email – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings with MarketBeat.com’s FREE daily email newsletter. A hearing into Suncor’s poison-pill challenge is set for Thursday.
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It remains to be seen what Suncor – or more significantly, the ASC – will have to say to that. Amanda Linett, a partner at Stikeman Elliott LP, noted on BNN that COS had a shareholder right plan forcing suitors to wait 60 days – and not the typical 35 days as per Canada’s takeover regime – before its bid would be permitted, after analysis of the bid was done, and alternative bids sought. It has been 51 days since Suncor’s initial bid for Canadian Oil Sands.
