Suncor reaches $6.6 billion deal to buy Canadian Oil Sands
Suncor has reached a deal with Canadian Oil Sands to buy them out, debt and all.
The $6.6 billion deal includes $2.4 billion of Canadian Oil Sands’ debt, amounting to an equivalent of 0.28 of a Suncor share for each COS share purchased.
The offer, however, is subject to conditions. Suncor must receive at least 51 per cent of the outstanding shares, and an adjustment to the expected U.S. federal income tax consequences.
“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,” said Don Lowry, Chairman of Canadian Oil Sands in a statement.
“Our shareholders clearly signaled they expected more for their COS shares, and the Board has worked to secure that under very challenging circumstances. Given the current market for energy equities, we recommend shareholders tender their shares to Suncor’s improved offer.”
The amended offer has an extended expiry time of 4 p.m. on February 5 of 2016. Should Canadian Oil Sands break the deal, they will owe Suncor $130 million.