CALGARY — Suncor Energy is looking to add another big chunk to its vast oilsands holdings – and take advantage of a prolonged rout in crude prices – with an unsolicited takeover bid for Canadian Oil Sands Ltd., the largest partner in the Syncrude mine north of Fort McMurray, Alta.
The Calgary-based company (TSX:SU) said Monday it’s offering $4.3 billion in its own shares and would take on about $2.3 billion of debt owed by Canadian Oil Sands, making the total transaction worth $6.6 billion.
Suncor says the offer would give shareholders of Canadian Oil Sands a stake in Canada’s largest integrated energy company, which includes the Petro-Canada chain of fuel stations as well as its own oil and gas production and refining operations.
The offer value is also 43 per cent above the market value for Canadian Oil Sands (TSX:COS), based on closing prices at the Toronto Stock Exchange on Friday.
Canadian Oil Sands stock shot up nearly 50 per cent amid speculation that a rival offer may emerge while Suncor shares dipped slightly in early trading.
Suncor says its offer will be open until Dec. 4, although it could be withdrawn or the deadline could be extended.
Earlier this year Suncor laid off over 1000 employees.
According to its website, Canadian Oil Sands holds a 36.74 per cent interest in the Syncrude, which is one of the largest oil sands companies in Alberta. In addition to oil sands sites near Fort McMurray, Syncrude operates an oil sands research and development facility in Edmonton.
With files from Karen Bartko, Global News