BUSINESS

Canadian Oil Sands Responds To Suncor's Hostile Takeover Bid With 'Poison Pill' Defence

10/07/2015 09:15 EDT | Updated 10/07/2016 05:12 EDT
CALGARY — Canadian Oil Sands Ltd. (TSX:COS) has adopted a new shareholder rights plan — often referred to as a poison pill defence — following a hostile takeover bid from Suncor Energy.

When a poison pill defence is triggered, shareholders can buy stock in the target company at a discount, making the shares less attractive to a hostile buyer.

The plan is meant to buy COS more time to weigh Suncor's all-stock offer of $4.3 billion — open until Dec. 4 — as well as any alternatives.

Suncor approached COS twice in March and April in the hopes of inking a friendly takeover deal, but the would-be target's board rejected those advance's unanimously.

The current offer is worth substantially less than the earlier overtures — $8.84 a share versus $11.84 as of March 31.

If Suncor — already the dominant oilsands producer — is successful in taking over COS, it would own just under half of the massive Syncrude Canada mine north of Fort McMurray, Alta.

 

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