Home / Financial News / Suncor Energy Inc to weigh options over weekend if it doesn’t win over enough Canadian Oil Sands Ltd shareholders
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Suncor Energy Inc to weigh options over weekend if it doesn’t win over enough Canadian Oil Sands Ltd shareholders

Suncor must secure 50 per cent of independent shareholders, which would blunt COS’s rights plan, or poison pill. The company could then extend the offer, and take the next step by squeezing out minority shareholders by calling a meeting.

With Suncor Energy Inc.’s all-share offer for Canadian Oil Sands Ltd. set to expire Friday evening, Suncor CEO Steve Williams and his advisors will likely huddle over the weekend to plot their next move.

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At stake is a $4.3-billion acquisition of COS and its key asset Syncrude Canada Ltd., in which Suncor already has a 12 per cent stake.

If Suncor manages to secure 66.67 per cent of Canadian Oil Sands shares by the deadline, the saga will be over. Poor interest in Suncor’s offer to buy COS shares at a 42 per cent premium of its price on Oct. 5, would likely scuttle the deal. But a scenario could emerge in which Suncor has more than 50 per cent of COS shares  — one of several conditions of the offer — but fall short of its threshold target.

In a conference call with investors this week, Williams noted that while he is looking to secure two-thirds of the shares, “I will watch with very close attention as the tenders come in … We’ll make the judgment through the weekend, as to whether we believe we will be able to move to closing the deal out.”

Paul Davis, a lawyer with Toronto-based law firm McMillan LLP, said Williams’ comments suggest the CEO would extend the offer if he feels he is close to clinching the deal.

Suncor must secure 50 per cent of independent shareholders, which would blunt COS’s rights plan, or poison pill. The company could then extend the offer, and take the next step by squeezing out minority shareholders by calling a meeting.

“All you need then is two-thirds of the shareholders who actually voted,” Davis said.

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