(Bloomberg) -- The chief executive officers of Suncor Energy Inc. and Canadian Oil Sands Ltd. both say they’ve got votes on their side as the nation’s top crude producer promotes a hostile takeover bid for its smaller rival. One of them is going to be disappointed.
Ryan Kubik, the Canadian Oil Sands CEO, said in an interview Thursday that shareholders, big and small, aren’t being wooed by the C$4.5 billion ($3.4 billion) unsolicited offer from Suncor, which the board rejected. His comments come a day after Suncor’s Steve Williams said in an interview that he expects major shareholders to back the deal.
Suncor is seeking to take advantage of an industry downturn to get even bigger, in part by making purchases including Canadian Oil Sands, the largest owner of the Syncrude mining project in northern Alberta. Both companies are trying to cut costs to remain profitable amid a crude price slump that has lasted 17 months and cost the Canadian energy industry more than 36,000 in lost jobs.
“The vast majority of major shareholders I’m talking to are saying that the Suncor offer is substantially inadequate,” Kubik said on Bloomberg TV Canada from Calgary, where the two companies are based. “When we poll the retail shareholders, and I get e-mails from those retail shareholders, they’re telling us the same thing.”
Shareholders are conveying the opposite view to Williams, according to the executive. In the first 10 days after the offer was made public, Williams and Suncor’s management met with 60 percent of the Canadian Oil Sands’ institutional shareholders, he said.
“The messages I got were very different than the messages they are talking about,” Williams said at Bloomberg’s Toronto office. “The majority say they will tender.”
The offer is for 0.25 of a Suncor share for each Canadian Oil Sands share. Based on Suncor’s stock price Thursday, that represents a 50 percent premium over the Canadian Oil Sands price before the bid was announced last month. Suncor would also take on the C$2.35 billion of Canadian Oil Sands debt, as of the end of the third quarter.
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