The Alberta Securities Commission will hear Suncor’s challenge of Canadian Oil Sands’ new shareholder rights plan on November 26, according to Suncor.
Suncor applied to have that plan stopped after it was put in place in response to the company’s $4.3 billion offer to purchase Canadian Oil Sands.
Shareholders have the final say as to whether to accept the offer which has been called hostile and exploitative by COS board and management.
Suncor’s Offer was made as a 60 day “permitted bid” in accordance with the terms of the COS shareholder rights plan approved by the COS board of directors and shareholders in 2013. COS’ new shareholder rights plan, adopted after Suncor’s bid without shareholder approval, would require a take-over bid to be open for 120 days in order to constitute a “permitted bid”.
“We are asking the ASC to strike down the new rights plan so that COS shareholders can decide for themselves – and in a timely fashion – whether to tender their shares to our full and fair Offer,” said Steve Williams, Suncor’s president and chief executive officer.
“COS has had more than enough time to identify and present to shareholders any value enhancement alternatives that may exist. The board and management of COS have been aware of our interest for more than 239 days, and our Offer respects the 60 day permitted bid term that the COS board of directors asked its shareholders to reconfirm in 2013. We believe this new COS rights plan is an inappropriate defensive tactic that runs counter to the best interests of COS shareholders,” he said.
Suncor’s Offer provides a period of 60 days for COS to consider ways to improve shareholder value and for COS shareholders to consider the Suncor Offer. Suncor believes this period is more than adequate for COS to consider a transaction with Suncor or present its shareholders with another value-enhancing alternative.
Meantime Canadian Oil Sands said it will continue to “defend shareholders and the protections put in place in its Shareholder Rights Plan” against what it calls a hostile takeover bid from Suncor.
COS said in light of the imbalance of information between Suncor on the one hand and COS shareholders and other potential bidders on the other, the Shareholder Rights Plan provides the Board with the time and flexibility needed to act in the best interests of shareholders and maximize value.
“Suncor has made a bid that is substantially undervalued, obviously opportunistic, and exploitive. Now it is trying to force COS shareholders to act in haste and against their best interests before the market and shareholders have access to the same information Suncor has about Syncrude,” said Donald Lowry, Chairman of Canadian Oil Sands.
“Our shareholders have told us they are against this substantially undervalued bid and that the timeframe of our Rights Plan is appropriate and fair to them,” he said.
The matter goes to the ASC board November 26.
