• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 6 hours OPEC will consider all options. What options do they have ?
  • 10 mins Danish Royal Palace ‘Surprised’ By Trump Canceling Trip
  • 4 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 10 hours What to tell my students
  • 3 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 18 mins A legitimate Request: France Wants Progress In Ukraine Before Russia Returns To G7
  • 14 hours Recession Jitters Are Rising. Is There Reason To Worry?
  • 10 hours With Global Warming Greenland is Prime Real Estate
  • 8 hours China Threatens to Withhold Rare Earth Metals
  • 23 hours TRUMP'S FORMER 'CHRISTIAN LIAISON' SAYS DEEPWATER HORIZON DISASTER WAS GOD'S PUNISHMENT FOR OBAMA ISRAEL DIVISION
  • 22 hours Maybe 8 to 10 "good" years left in oil industry * UAE model for Economic Deversification * Others spent oil billions on funding terrorism, wars, suppressing dissidents, building nukes * Too late now
  • 19 hours CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 24 hours Flaring is at Record Highs in Texas
Oil Markets Dominated By Bearish Sentiment

Oil Markets Dominated By Bearish Sentiment

With the latest trade war…

Saudi Arabia’s Newest Strategy To Send Oil Prices Higher

Saudi Arabia’s Newest Strategy To Send Oil Prices Higher

Saudi Arabia’s efforts have been…

Will Suncor’s Hostile Takeover of Canadian Oil Sands Succeed?

It all depends on whom you believe.

Suncor Energy Inc. CEO Steve Williams says a majority of shareholders in Canadian Oil Sands Ltd. support his hostile bid to buy their company. His counterpart at Canadian Oil Sands, Ryan Kubik, says they don’t.

The truth will come out Friday night, when Suncor’s bid for Canadian Oil Sands expires. It’s been on the table for nearly 15 months. Suncor has offered 0.25 of one of its shares for each share in Canadian Oil Sands, and Williams said Tuesday that Canadian Oil Sands shares could lose up to 40 percent of their value, or a total of US$3.1 billion, unless the sale goes through.

Kubik says he’s spoken with his company’s investors, both retail and individual, and says they’re opposed to a takeover by Suncor. But in an interview Monday with Bloomberg, William said that “we’ve been getting a very different message from shareholders … that Canadian Oil Sands shareholders do not support an independent Canadian Oil Sands.”

Related: 10 Key Energy Trends To Watch For In 2016

As a result, Williams said, Suncor has no intention of increasing its offer to buy 67 percent of the shares in Canadian Oil Sands. “Let me be clear and frank,” Williams said in a conference call on Tuesday. “We believe our offer is full and fair and we have no plans” to increase the offer for Canadian Oil Sands.

Kubik told Bloomberg Canada TV that the managers and boards of both companies have not been in touch with each other since April about sweetening the offer, although he added that Canadian Oil Sands has discussed with others the possibility of “maximizing value” for his company’s shareholders and concluded that the best option was for Canadian Oil Sands to remain independent.

The company’s shareholders believe Suncor’s offer “is substantially undervalued and they don’t intend to tender their shares,” Kubik said.

Related: Oil Prices Continue To Slide As Gasoline Inventories Build

Suncor’s ultimate goal is not so much to own Canadian Oil Sands but to raise its share in its bitumen mining joint venture with Syncrude Canada Ltd. from its current level of 12 percent to 49 percent, which would make it the largest of Syncrude’s seven shareholders. The company that now holds that title is Canadian Oil Sands, which is struggling under the weight of depressed oil prices.

Since 2010 Syncrude has failed to achieve its output targets. And since crude oil prices began their plunge in the summer of 2014, the company’s production levels fell to their lowest in 10 years. This has a similar negative effect on earnings by Canadian Oil Sands.

As a result, Williams said, Canadian Oil Sands’ investors need to accept Suncor’s offer. “Let the facts speak for themselves,” he said.

Related: BP’s CEO Finally Sees Oil Prices Bottoming Out

One major investor in Canadian Oil Sands, though, is letting full-page advertisements in several Canadian newspapers speak on his behalf. Seymour Schulich, who owns about 5 percent of the company, urged fellow shareholders to reject Suncor’s offer, at least at its current price. In the ad he wrote, “The fact is Suncor needs Canadian Oil Sands more than we need them.”

In an interview Tuesday with CBC News, however, Schulich acknowledged that he wasn’t certain that his strategy of resisting Suncor’s offer was guaranteed to succeed. “I used to tell my clients when I was a money manager that if I could read the future I wouldn’t have to do this for a living,” he said. “I have no idea [whether his plan might succeed].”

But Schulich stressed, “I’ve had a lot of people talk to me who don’t like the bid.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play