At the end of the day, after all the crosstown mudslinging, all it took from Suncor was a fractionally better offer to bring Canadian Oil Sands onside.
The oilpatch is in trouble, with U.S. crude prices under $30 and Alberta's Western Canada Select trading around $15 US.
"We are in full crisis mode," said Martin Pelletier, an investment manager with TriVest Wealth Counsel. "In order to survive, companies are going to have to get bigger."
It has been many months since energy analysts began calling for a wave of takeovers in the energy sector. That wave never came, with the number of mergers significantly lower in 2015 than in 2014. Many firms in a position to sell were holding out for better prices. Those in a position to buy were not going to overpay.
But that standoff looks to be coming to an end.
Many companies barely hanging on
Companies that have been hanging on, waiting for a price recovery, are now struggling to cover head office expenses with oil trading under $30.
'I think that's the nature of business, you need to take advantages of crises if you're in the position to do so.' - Rob Mark, 3Macs
"The ability for companies at this price point to stay the course is becoming increasingly difficult," said Bruce Edgelow, vice-president of strategic initiatives at ATB Financial, a major lender to the junior energy sector.
"There are very few producers in this environment that are cash-flow positive — period — from operations, let alone the burden of running the company."
Edgelow suggests the Suncor-Canadian Oil Sands deal will serve as a template for future deals, saying that Canadian Oil Sands held out for what it thought would be a fair price.
"In all cases, it is about the valuation that people are prepared to pay," said Edgelow. "What is a fair price? At the same time, no one is overpaying in this market. They're not paying for land, they're not paying for non-producing wells."
Edgelow conservatively estimates there is more than $10 billion in capital sitting on the sidelines — money that comes from Asia, the U.S., and Canada — waiting to be invested in Western Canadian oil.
For example, Calgary's Arc Financial raised $1.55 billion in 2015 to invest in energy, and Annapolis Capital raised $300 million over a similar period.
"People aren't scared off," said Edgelow. "But they're not willing to overpay."
More hostile deals?
The initial Suncor bid for Canadian Oil Sands came as a surprise to many, since hostile deals are somewhat rare in the tight-knit oilpatch. Friendly deals are much more likely to happen in an industry when everyone is, well, friendly.
But that could change.
"I think for the future, it's more likely that you're going to see more of these," said Rob Mark, an energy analyst with Toronto-based 3Macs.
"Always your first option is to do it as a friendly," he said. "But in the past, if you couldn't get a friendly deal, the acquirer would walk away or bide its time. But I think seeing this deal, they would be more inclined to put it to shareholders and see what they say.
"I think that's the nature of business, you need to take advantages of crises if you're in the position to do so."
Where is the U.S. money?
One of the interesting differences in this downturn is that there hasn't been a flood of U.S. investors — something you would expect with the loonie trading at such a serious discount. Mark believes that's likely because there is such turmoil south of the border in the shale-producing region, there's been no need to come north.
Mark suggests Cenovus is one company that could be vulnerable, because it is sitting on some of the best non-mine assets in the oilsands. "In a way, I do think they are at risk of a hostile bid," he said.
"For a large company who wanted to improve their in-situ oilsands development and could afford a bite that large — in terms of quality, in terms of going out and buying the best assets — Cenovus would be at the top of that list."
Cenovus's drawback is that it's too valuable for most Canadian companies while, at the same time, the oilsands have lost favour with the international community.
"Oilsands are not top of mind," said Mark. "They are way down the priority list."
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