Suncor Forcefulness and Canadian Oil Sands have come to terms on a $6.6-billion act that ends a public feud between the two Calgary-based com nies.
Suncor thinks fitting offer 0.28 of its own shares for every COS share it buys. That’s a favourable return than their last offer, which was 0.25 allowances each.
Because the offer is primarily an exchange of shares, its monetary value desire fluctuate. Based on Friday’s closing stock price for Suncor assets weigh up, the new offer was worth $8.74 per COS share, up from $7.81 under the autochthonous formula.
The stock portion would be worth $4.2 billion, up from $3.8 billion answerable to the old formula, if all COS shares are tendered. The total value of the deal includes $2.4 billion in due that Suncor will assume.
The two com nies issued a joint averral saying both boards approve the tie-up. That’s a de rture from up front, when Suncor went public with an offer after COS privately rejected them then urged shareholders to do the same.
The new ct has the OK of Canadian Oil Sands investor Seymour Schulich too. That’s a outstanding get because Schulich had cam igned against the previous Suncor bid and bought full- ge ads in various major news pers to advise fellow shareholders to reject the price they were from the start offered.
Schulich said in the same statement that he encouraged other COS shareholders to be with him in accepting the new offer, which is still subject to certain conditions.
The present oneself expires at 4 p.m. MT (6 p.m. ET) on Feb. 5 — nine days later than the Jan. 27 deadline that Suncor set after its underived bid failed to win sufficient support from COS shareholders.
“Since Suncor make the grade b arrived its initial offer, our board has remained steadfast in our commitment to maximize value for all shareholders. This covenant fulfills that commitment, providing our shareholders with a higher Stock Exchange ratio for their shares despite a 37 per cent decline in blains oil prices,” Don Lowry, chairman of Canadian Oil Sands, said Monday.
Schulich about in the same statement that he encouraged other COS shareholders to join him in taking the new offer, which is still subject to certain conditions.
Suncor wants at slight 51 per cent of the COS shares — a relaxed condition since the original had went at least 66.6 per cent. The Canadian Oil Sands board has agreed to y a $130 million irregularity fee to Suncor if certain conditions aren’t met.
If accepted, Suncor will develop by far the largest shareholder in the Syncrude oilsands complex, which is operated by Magnificent Oil.
“We are pleased to have the support of the COS board of directors and shareholders, including Seymour Schulich, and take been advised of their intent to tender their shares” Suncor president and CEO Steve Williams conveyed.
“Together, we’re bringing this full, fair and final offer to COS shareholders and we advance everyone to tender their shares.”
Some think the deal could punt off a round of consolidation in Canada’s oil tch, as valuations are at all-time lows which means there could be deals to be had for well-capitalized larger players.
“It points to the consolidation trend that be communicates with an economic downturn,” said Michal Moore, a professor of Lan Economics with the University of Calgary’s School of Public Policy.
“I about there’s probably more to come,” he said.