The Case For Investing In Suncor Energy
Elliott Gue • 12 Comments
Elliott Gue • 12 Comments
Wed, Apr. 27, 7:56 PM
- Suncor Energy (SU -0.5%) says it's agreed to take a bigger interest in the Syncrude joint venture, buying another 5% for about $937M.
- The move brings Suncor's share of Syncrude to 53.74% from the previous 48.74%. The company says it can now profitably grow production by more than 40% Y/Y, heading toward its target of 800,000 bpd even sooner, in 2019.
- It's a "strategic fit for our portfolio," says CEO Steve Williams, "consistent with our focus on capital and operational discipline and builds on our successful acquisition of Canadian Oil Sands, increasing our production capacity by 17,500 barrels per day of high-quality light sweet synthetic crude."
- Two weeks ago, Suncor said it was open to raising its Syncrude stake even after a $6.6B acquisition of Canadian Oil Sands.
- Now read Suncor Energy - A Safe Way To Ride The Rally In Oil »
Mon, Feb. 8, 2:43 PM
- Canadian Oil Sands (OTCQX:COSWF -1.2%), preparing to be taken over by Suncor Energy (SU -1.6%), is overhauling its senior leadership team and board of directors.
- In as the new CEO is Sandy Martin, SU's VP of strategy and commercial development; out are Ryan Kubik, who was CEO during the takeover fight, and Donald Lowry, who was chairman during the period.
- New Chairman Harry Roberts was a senior VP at SU before his retirement in 2010, and the four other directors also are connected to the acquirer.
Mon, Feb. 8, 10:15 AM
- Suncor Energy (SU -3.4%) says nearly 73% of Canadian Oil Sands (OTCQX:COSWF -3.5%) shares and accompanying rights have been tendered to its C$4.2B takeover offer.
- SU says that as a result, it will be able to ensure that the deal will be completed and it will acquire the remainder of the outstanding COS shares.
- SU succeeded in winning over resistant COS management and shareholders after sweetening its offer last month.
Tue, Jan. 19, 6:28 PM
- Suncor’s (NYSE:SU) expected takeover of Canadian Oil Sands (OTCQX:COSWF), which would boost its stake in the Syncrude Canada oil sands venture to 49% from its current 12%, is a "potentially positive” step that could improve output and productivity, says Brian Tuffs, head of Sinopec’s (NYSE:SNP) Canadian operations.
- SNP is the fourth-largest owner of Syncrude, with a 9% stake, and has invested C$10B in Canada, including the Syncrude stake, and Tufts says the company sees its Canadian assets as “core” to its long-term strategy.
- SU CEO Steve Williams has said the company would devote more resources to boosting Syncrude’s output.
Mon, Jan. 18, 8:29 AM
- Suncor Energy (NYSE:SU) and Canadian Oil Sands (OTCQX:COSWF) have reached a friendly deal after the former agreed to raise its takeover offer to about C$4.24B ($2.92B).
- The new all-stock transaction, which boosts the overall bid value from about C$3.78B, consists of 0.28 of a Suncor share for each Canadian Oil Sands share, up from 0.25 of a share previously.
- The revised offer, which will remain open until Feb. 5, is also subject to at least 51% of Canadian Oil Sands' shares being tendered and includes a C$130M breakup fee.
- Previously: Suncor, Canadian Oil Sands in talks for friendly takeover (Jan. 18 2016)
Mon, Jan. 18, 4:07 AM
- Suncor Energy (NYSE:SU) is working on a friendly transaction to raise its all-stock offer for rival Canadian Oil Sands (OTCQX:COSWF), and an announcement about the deal could come as early as today, WSJ reports.
- The two companies have been working on a revised bid since Friday, sources said, but the value of the potential revised transaction couldn't be learned.
- Suncor's existing offer of 0.25 of a share for each share of Canadian Oil Sands is currently worth about C$3.78B ($2.59B).
Mon, Jan. 11, 8:39 AM
- Canadian Oil Sands (OTCQX:COSWF) calls on Suncor Energy (NYSE:SU) to disclose details of how shareholders voted in SU's hostile takeover offer for the company before the January 8 deadline was extended to January 27.
- COSWF says it believes SU is obligated to disclose material facts on its bid, including the actual tender results, and that a disclosure is required under Canadian and U.S. securities law in this situation.
- SU on Friday did not disclose the number of shares tendered to the offer, or provide a reason for the extension of the deadline.
Fri, Jan. 8, 10:37 PM
- Suncor Energy (NYSE:SU) extends its hostile takeover offer for Canadian Oil Sands (OTCQX:COSWF) to January 27 after failing to win the two-thirds support it was seeking from shareholders.
- "Since nothing about this bid has changed other than the date, we remain steadfast in our conclusion that there is more value for shareholders in a strong, independent Canadian Oil Sands,” chairman Donald Lowry says.
- COS shares closed today at $7.47 in Toronto, ~10% below the value of the bid based on SU’s closing share price, suggesting the bid likely would be unsuccessful.
Fri, Jan. 8, 10:49 AM
- Suncor Energy (SU +0.7%) likely would weigh its options over the weekend if it fails to convince enough Canadian Oil Sands (OTCQX:COSWF -3.4%) shareholders to accept its C$4.3B takeover offer which is set to expire tonight, Financial Post reports.
- SU must secure 50% of independent shareholders, which would blunt COSWF’s poison pill; the company then could extend the offer and squeeze out minority shareholders by calling a meeting, and Toronto-based lawyer Paul Davis of McMillan LLP believes CEO Steve Williams’ comments suggest SU would extend its offer if Williams feels the deal is close.
- COSWF shares have been volatile over the past few days and now trade made than $1 lower than SU's offer of C$8.82; “I would take from that people expect it [Suncor’s bid] would fail,” says Bill Gula, M&A lawyer at Hansell LLP in Toronto.
Thu, Jan. 7, 12:49 PM
- Suncor Energy’s (SU -2.1%) $4.3B takeover of Canadian Oil Sands (OTCQX:COSWF +1.3%) looks far from certain, with the target’s share price trading at a record gap to the bid just a day before expiring.
- COSWF closed yesterday at $7.47 in Toronto, putting SU’s $8.52/share offer at a record 14.1% premium since the deal was announced on Oct. 5.
- The market "seems to be pricing in a reasonably high probability it doesn’t happen, [which] reflects the fact that the market is concerned about the downside risk here if it doesn’t go ahead,” BMO Capital's Randy Ollenberger says.
- Shareholders against the deal, including Seymour Schulich, have been vocal in their opposition in claiming SU is making a low-ball offer, heightening speculation about how many shareholders agree with them.
- Others say SU ultimately will prevail, including Samara Fund president Ben Cubitt, who says “if this bid goes away, it trades probably at $5... These guys, I assume, have canvassed the world for someone willing to pay something more and haven’t found anyone. So it is impossible to argue that at this moment in time it is worth more.”
Tue, Jan. 5, 2:26 PM
- Suncor Energy (SU -0.1%) CEO Steve Williams says his company is “slightly ahead" of the tender numbers needed to secure its C$4.3B bid for Canadian Oil Sands (OTCQX:COSWF +1.6%).
- "We’ve been seeing some of the bigger shareholders this week again, and we’re getting a very clear message that there is no support for an independent Canadian Oil Sands,” according to Williams.
- Continuing the sniping between the two sides, Williams says "all Canadian Oil Sands is offering is hope for a price recovery that the market doesn’t see coming anytime soon and operational improvements at Syncrude which there unfortunately is simply no evidence."
- Major COSWF shareholder Seymour Schulich says he is not selling at the current offer price, and that 28% of shareholders are against the deal; Williams is "quite confident" that there is no such substantial figure aligned with Schulich.
- Earlier: Suncor not ruling out raising bid for Canadian Oil Sands, CEO says (Jan. 4)
Mon, Jan. 4, 3:59 PM
- Suncor Energy (SU -1.9%) CEO Steve Williams says his company has not ruled out increasing its offer to buy Canadian Oil Sands (OTCQX:COSWF -5%), just days before a self-imposed January 8 deadline for a takeover deal.
- The CEO tells Dow Jones that SU's offer of 0.25 of a share for each COSWF share, a deal currently valued at ~C$4.28B ($3.09B) remains fair, especially since crude oil prices have continued to fall after making its bid in early October, but "I wouldn’t rule anything completely in or out" on additional incentives to win over more shareholders.
- Williams says he expects to announce early next week whether or not the company will proceed with the buyout.
- Earlier: Canadian Oil Sands plans to remain independent after Suncor bid
- Earlier: Schulich says he plans to hold Canadian Oil Sands shares in Suncor bid
Mon, Jan. 4, 12:23 PM
- Investor Seymour Schulich says he will not tender his shares to Suncor Energy (SU -2.5%) in its C$4.3B ($3.1B) hostile bid for Canadian Oil Sands (OTCQX:COSWF -5.3%), preferring to hold on to his shares and wait for a rebound in crude oil.
- "Everybody I have talked to thinks the offer is too low,” says Schulich, who says he owns 5% of COSWF, making him one of the company's biggest shareholders.
- SU has offered 0.25 of its own shares for each COSWF share in the offer worth ~C$8.93/share, a 44% premium to COSWF's pre-bid trading price.
Mon, Jan. 4, 7:51 AM
- A defiant Canadian Oil Sands (OTCQX:COSWF) issues a "declaration of independence," contingent upon the expiration of Suncor Energy's (NYSE:SU) hostile bid on January 8.
- The board has considered a “full range of alternatives against the Suncor offer, including a full or partial sale to other parties, and a royalty financing,” Chairman Don Lowry says in a letter to shareholders. “Independence is, by far, the better decision.”
- Canadian Oil Sands “has the financial resources to weather the current downturn... [with] significant inherent value as an independent company," the letter also says.
Dec. 15, 2015, 5:45 PM
- Canadian billionaire investor Seymour Schulich, who initially called Suncor’s (NYSE:SU) C$4.3B offer for Canadian Oil Sands (OTCQX:COSWF) "ridiculous," now says he and potentially other major investors would be willing to support the deal.
- Schulich, who owns 5% of COSWF, says he is part of a group of major investors who together control 28% of the company and who will not tender their shares with SU, which is offering to exchange each COSWF share for 0.25 SU shares.
- He says none of his group wants to sell at a low point in the oil price cycle but could be willing to support the deal if SU gave them an option to buy more shares should oil prices rise in the future - "If you give us a warrant on your stock that if oil goes up in two years... the warrant has value and the shareholder gets value... If they put that in, I could support the deal."
Dec. 15, 2015, 10:52 AM
- "Hope is still not a strategy," Suncor (SU +1.2%) says as it urges Canadian Oil Sands (OTCQX:COSWF +2.6%) shareholders to tender their shares to its offer for the company.
- In a letter to COSWF shareholders, SU highlights the premium it is offering and warns that the share price likely would drop "sharply" if its bid is rejected.
- "Your Board is telling you that COS will be better off continuing as a standalone company," the letter says. "What they aren't telling you is that in this environment, it could take as long as 10 years before COS would have enough cash flow to fix its balance sheet and reinstate a significant dividend."
Suncor Energy, Inc. is an integrated energy company, which develops petroleum resource basins. It explores, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. Suncor Energy, through its Petro-Canada brand, provides oil sands development & upgrading,... More
Sector: Basic Materials
Industry: Independent Oil & Gas
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