Suncor's hostile bid for Canadian Oil Sands expires this evening

Shareholders of Canadian Oil Sands (COS) have until 6 p.m. MT this evening to act if they want to tender their shares to Suncor Energy's $4-billion all-stock takeover offer. 

Suncor has warned it will walk away if it doesn't get enough support for its hostile bid. 

The company took its offer directly to COS shareholders last October after failing to reach a friendly deal with COS management.

Since then, it's been a pitched battle for the hearts and wallets of Canadian Oil Sands stockholders, with Suncor arguing that in a low oil price environment, COS shareholders' interests would best be looked after if they were part of a much larger Suncor.

Canadian Oil Sands, for its part, has urged its stockholders to reject Suncor's offer as inadequate. COS says it's well-positioned for a rebound in oil prices and says its shareholders would best be served if the company remains independent.  

Pressure builds

Both companies have ratcheted up the pressure in recent days as the tender deadline approached, putting out competing news releases and publishing full-page newspaper ads. 

"Taking no action means rejecting Suncor's offer and risking a substantial decline in the value of your investment," Suncor CEO Steve Williams warned COS investors in a statement Thursday.

COS management, meanwhile, accused Suncor of fear-mongering in a Monday statement. "Make no mistake, Suncor will try to instill fear in the final hours before its bid expires," it warned. 

Suncor wants two-thirds of COS shares to be tendered for its offer to go ahead.

What if the two-thirds threshold isn't quite met? "I will watch with very close attention as the tenders come in," Williams said during a conference call on Tuesday. "I will make the judgment through the weekend as to whether we believe we will be able to move toward closing the deal out.

"If we don't get enough COS shareholders to indicate quite clearly to us that we can proceed, we will not go ahead with the deal, so I am looking for a very clear message by this Friday that this deal is going to close," he said.

Canadian Oil Sands' main asset is its 37 per cent stake in the Syncrude oilsands project in northern Alberta. Suncor currently owns 12 percent of Syncrude.

COS shares were trading at $7.29 Friday morning. They have dropped 12 per cent this week as the deadline approached and the price of oil continued to fall.

Suncor shares were up eight cents at $33.38. The shares have lost seven per cent this week.

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