Suncor Agrees To Lift All Stock Offer To Canadian Oil Sands

(RTTNews) - Canadian energy company Suncor Energy Inc. (SU.TO, SU) Monday agreed with Canadian Oil Sands Limited (COS.TO) to lift its initial stock offer to 0.28 of a Suncor share for each Canadian Oil share. The amended offer has a total aggregate transaction value of approximately C$6.6 billion including Canadian Oil' estimated debt of C$2.4 billion.

The amended offer has the support of the Boards of Directors of both companies.

Steve Williams, Suncor's president and CEO, said, "We are pleased to have the support of the COS Board of Directors and shareholders, including Seymour Schulich, and have been advised of their intent to tender their shares."

Suncor's previous offer of 0.25 of a share for each COS share was rejected by Canadian Oil Sands, stating that the offer was substantially undervalued and opportunistic hostile bid. Suncor has been under pressure to sweeten its bid after it extended the deadline for acceptance of its bid earlier this month.

The companies said the revised offer is subject to certain conditions, including the acquisition by Suncor of at least 51% of the outstanding Shares being validly tendered under the amended offer and not withdrawn. This minimum tender condition has been lowered from 66?%.

The Canadian Oil Board recommends that its shareholders tender to the new offer, noting that it is fair and is in the best interests of the company.

Don Lowry, Chairman of Canadian Oil Sands, said, "Since Suncor made its initial offer, our Board has remained steadfast in our commitment to maximize value for all shareholders. This agreement fulfills that commitment, providing our shareholders with a higher exchange ratio for their shares despite a 37 percent decline in spot oil prices."

The amended offer will include an extension of the expiry time which is currently anticipated to be extended to February 5. Shareholders who tender by the expiry date will be entitled to receive Suncor's first quarter 2016 dividend anticipated to be paid in late March, 2016.

In the deal, JP Morgan and CIBC World Markets are financial advisors to Suncor. RBC Capital Markets is COS' financial advisor.

Suncor Energy shares closed Friday's trading at $21.49, down 4.70 percent.