The Successful Investor Hotline – Friday, December 4, 2015

Article Excerpt

SUNCOR ENERGY INC., $36.03, Toronto symbol SU, has extended its hostile all-stock takeover offer for Canadian Oil Sands (Toronto symbol COS) from December 4, 2015, to January 8, 2016. That’s because Alberta securities regulators upheld Canadian Oil Sands’ request for more time to look for another buyer. However, Suncor did not increase the size of its offer: Canadian Oil Sands investors would still receive 0.25 of a Suncor share for each share they own. The deal requires at least two-thirds of shareholders to tender their holdings. Canadian Oil Sands’ main asset is its 36.74% stake in the Syncrude oil sands development near Fort McMurray, Alberta. Suncor already owns 12.0% of Syncrude, so buying Canadian Oil Sands would give it effective control, with a 48.74% stake. The company feels its expertise running similar projects would help Syncrude improve its efficiency and profits. Based on Suncor’s current share price, the offer is worth $4.4 billion. To put that in context, Suncor’s market cap (or the…