Canadian Oil Sands rejects Suncor bid; adopts poison pill
Canadian Oil Sands calls Suncor's bid "opportunistic" and has adopted a poison pill defence.
On Monday Suncor commenced an unsolicited offer for struggling Canadian Oil Sands (TSE:COS) for $4.3 billion. Canadian Oil Sands has been labouring under low oil prices while Suncor has weathered the downturn through its higher margin retail and downstream refining operations.
Canadian Oil Sands adopted what it is calling a shareholder rights plan. Following the acquisition of 20 per cent or more of the outstanding shares by any person, each right held by a person other than the acquiring person would entitle the holder to purchase shares at a substantial discount.
The move by Canadian Oil Sands is buying the company time.
"The board will consider Suncor's unsolicited offer in both the current context and in light of the strong long-term potential of Canadian Oil Sands," says Donald Lowry, Chairman of the Board, in a news release.
"Shareholders do not need to take any action or make any decision about the Suncor offer until the Board has had an opportunity to fully review the offer and to provide a recommendation based on careful analysis."