Suncor’s all-stock offer for Canadian Oil Sands is valued at about C$4.3 billion ($3.29 billion). The total transaction for the largest partner in Syncrude would be $6.6 billion.
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If the offer is accepted, COS shareholders will get a “45% dividend uplift”, Suncor said.
Canadian Oil Sands’ stock price has declined with oil prices, and the company said lower oil prices and an increasing debt load had prompted it to consider selling a few of its future production, according to the Journal.
Each Canadian Oil Sands shareholder will receive 0.25 of a Suncor share for each share held.
“By accepting this offer, COS shareholders will become investors in Canada’s leading integrated energy company with 50 years of experience in oil sands operations and a track record of returning significant value to shareholders”.
The offer will be open for acceptance until 5:00 p.m. on December 4, 2015.
Canadian Oil Sands was not immediately available for comment.
On a conference call, Williams said Suncor made a few overtures to its target in the spring, but was rebuffed. The share price value of Canadian Oil Sands has been dragged down with it, Williams noted. COS is up 46% and the most actively traded on the TSX.
According to Thomson Reuters data, TD Asset Management is the largest shareholder in Canadian Oil Sands, with about five per cent of COS common stock.
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Suncor slipped 2.3 percent to C$34.57. COS shares were trading at $9.10.
