The Successful Investor Hotline – Thursday, March 24, 2016

Article Excerpt

SUNCOR ENERGY INC., $35.86, Toronto symbol SU, has completed its all-stock takeover of Canadian Oil Sands (Toronto symbol COS). Under the deal, Canadian Oil Sands investors received 0.28 of a Suncor share for each share they held. As a result, the Toronto Stock Exchange delisted Canadian Oil Sands’ shares on March 23, 2016. Based on Suncor’s share price just before the deal closed, it paid $4.8 billion for Canadian Oil Sands. If you include Canadian Oil Sands’ debt of $2.4 billion, the total price was $7.2 billion. To put that in context, Suncor’s market cap (the value of all outstanding shares) is $55.6 billion. Canadian Oil Sands’ biggest asset is a 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 gives it a controlling 48.74% stake. The company feels its experience in running similar projects will help Syncrude improve efficiency and profits. OUR RECOMMENDATION: Suncor is a buy. Suncor recent coverage April…