Suncor Energy commences offer for outstanding shares of Canadian Oil Sands Limited

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Suncor Energy commences offer for outstanding shares of Canadian Oil Sands Limited

by ahnationtalk on October 5, 2015599 Views

Press Releases

CALGARY, ALBERTA–(Oct. 5, 2015) – Suncor Energy Inc. (“Suncor”) today announced that it has formally commenced an unsolicited offer (the “Offer”) to Canadian Oil Sands Limited (“COS” TSX Symbol “COS”) shareholders to acquire all of the outstanding shares of COS for total consideration of approximately $4.3 billion. Under the terms of the Offer, each COS shareholder will receive consideration of 0.25 of a Suncor share per COS share. Including COS’ estimated outstanding net debt of $2.3 billion as at June 30, 2015, the total transaction value is approximately $6.6 billion.

“We believe this is a financially compelling opportunity for COS shareholders,” said Steve Williams, Suncor’s president and chief executive officer. “By accepting this Offer, COS shareholders will become investors in Canada’s leading integrated energy company with 50 years of experience in oil sands operations and a track record of returning significant value to shareholders. We’re offering a significant premium to COS’ current market price and also providing exposure to a meaningful dividend increase. We’re confident in the value this Offer provides to COS shareholders.”

Benefits of the Offer:

  • Premium to market price. The Offer represents a significant premium of 43% based on the closing prices of the COS shares and the Suncor shares on the TSX on October 2, 2015, the last trading day before the Offer was announced, and a 35% premium to the volume weighted average trading price of the COS shares on the TSX for the 30 trading days ended October 2, 2015.
  • Superior returns to shareholders. Suncor’s annual dividend has increased for 13 consecutive years, and in the past five years, Suncor has provided its shareholders with a compound annual dividend growth rate in excess of 20%, placing it among the leaders of its peer group. If the Offer is accepted, COS’ shareholders would experience a 45% dividend uplift.
  • Investment in an integrated energy company with significant liquidity and access to capital. Suncor’s integrated business model is designed to generate consistent cash flow which has enabled Suncor to fund its capital program, dividend commitments and planned growth projects, even in sustained periods of lower commodity prices. COS shareholders would be positioned to benefit from Suncor’s integrated model and ongoing production growth, and continue to participate in any oil price recovery.
  • Established and experienced management team has delivered strong financial and operational results. Suncor is led by its president and chief executive officer, Steve Williams, and his executive team, who together bring deep oil sands and energy experience. In addition, Suncor’s board of directors is composed of highly capable, experienced, diverse and independent directors. Suncor maintains an intense focus on operational excellence, continuous improvement and capital discipline, all of which have delivered strong results for shareholders. As a result, Suncor is well positioned to capture the value potential in COS’ assets.
  • Opportunity to defer taxation. Canadian resident shareholders who hold their shares as capital property will generally be entitled to an automatic rollover to defer Canadian taxation on the disposition of their shares. Such Canadian shareholders may choose to report a capital gain or loss on the exchange of their shares in which case the rollover would not apply to any of their shares. Suncor intends for the Offer to be treated as a reorganization for U.S. federal income tax purposes such that no gain or loss will generally be recognized by U.S. holders on the disposition of their shares.

About the Offer:

The Offer will be open for acceptance until 5:00 p.m. (Calgary time) on December 4, 2015, unless extended or withdrawn. Suncor has structured the Offer to meet the requirements of a “Permitted Bid” under COS’ existing shareholder rights plan.

The Offer is subject to certain customary conditions including, among other items, that more than 66 2/3% of the outstanding COS shares (calculated on a fully-diluted basis) shall have been validly tendered under the Offer and not withdrawn and certain regulatory approvals (as outlined in the offer to purchase and take-over bid circular and related offer documents (the “Offer Documents”) that will be filed on SEDAR and with the SEC, as defined herein, later today and throughout the currency of the Offer) shall have been obtained. Subject to applicable law, Suncor reserves the right to withdraw or extend the Offer and to not take up and pay for any COS shares deposited under the Offer unless each of the conditions of the Offer is satisfied or waived by Suncor at the expiry time of the Offer. COS shareholders are strongly encouraged to read the Offer Documents carefully and in their entirety since they contain additional important information regarding Suncor and the terms and conditions of the Offer.

Copies of the Offer Documents referred to above may also be obtained free of charge upon request made to the corporate secretary of Suncor at P.O. Box 2844, 150 – 6 Avenue S.W., Calgary, Alberta Canada T2P 3E3.

This news release does not constitute an offer to buy or sell, or an invitation or a solicitation of an offer to buy or sell any securities of COS or Suncor. The Offer is made exclusively by means of, and subject to the terms and conditions set out in, the Offer Documents referred to above and other related Offer documents. While the Offer will be made to all holders of COS shares, the Offer will not be made or directed to, nor will deposits of shares be accepted from or on behalf of, holders of shares in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. However, Suncor may, in its sole discretion, take such action as it may deem necessary to extend the Offer to holders of COS shares in any such jurisdiction.

Advisors and Information Agent

Suncor has engaged J.P. Morgan Securities LLC to act as its financial advisor and Blake, Cassels & Graydon LLP and Sullivan & Cromwell LLP as its legal advisors in connection with the Offer.

D.F. King has been retained as information agent for the Offer. Shareholders may contact D.F. King at:

Toll Free in North America: 1-866-521-4427

Banks, Brokers and Collect Calls: 1-201-806-7301

Toll Free Facsimile: 1-888-509-5907

Email: [email protected]


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