Sun­cor Energy com­mences of­fer for out­stand­ing shares of Cana­dian Oil Sands Lim­ited

The McLeod River Post - - The Patch -

Sun­cor Energy Inc. (“Sun­cor”) an­nounced that it has for­mally com­menced an un­so­licited of­fer (the “Of­fer”) to Cana­dian Oil Sands Lim­ited (“COS” TSX Sym­bol “COS”) share­hold­ers to ac­quire all of the out­stand­ing shares of COS for to­tal con­sid­er­a­tion of ap­prox­i­mately $4.3 bil­lion. Un­der the terms of the Of­fer, each COS share­holder will re­ceive con­sid­er­a­tion of 0.25 of a Sun­cor share per COS share. In­clud­ing COS’ es­ti­mated out­stand­ing net debt of $2.3 bil­lion as at June 30, 2015, the to­tal trans­ac­tion value is ap­prox­i­mately $6.6 bil­lion.

“We be­lieve this is a fi­nan­cially com­pelling op­por­tu­nity for COS share­hold­ers,” said Steve Wil­liams, Sun­cor’s pres­i­dent and chief ex­ec­u­tive of­fi­cer. “By ac­cept­ing this Of­fer, COS share­hold­ers will be­come in­vestors in Canada’s lead­ing in­te­grated energy com­pany with 50 years of ex­pe­ri­ence in oil sands oper­a­tions and a track record of re­turn­ing sig­nif­i­cant value to share­hold­ers. We’re of­fer­ing a sig­nif­i­cant pre­mium to COS’ cur­rent mar­ket price and also pro­vid­ing ex­po­sure to a mean­ing­ful div­i­dend in­crease. We’re con­fi­dent in the value this Of­fer pro­vides to COS share­hold­ers.”

Ben­e­fits of the Of­fer: • Pre­mium to mar­ket price. The Of­fer rep­re­sents a sig­nif­i­cant pre­mium of 43 per cent based on the clos­ing prices of the COS shares and the Sun­cor shares on the TSX on Oc­to­ber 2, 2015, the last trad­ing day be­fore the Of­fer was an­nounced, and a 35% pre­mium to the vol­ume weighted av­er­age trad­ing price of the COS shares on the TSX for the 30 trad­ing days ended Oc­to­ber 2, 2015.

• Su­pe­rior re­turns to share­hold­ers. Sun­cor’s an­nual div­i­dend has in­creased for 13 con­sec­u­tive years, and in the past five years, Sun­cor has pro­vided its share­hold­ers with a com­pound an­nual div­i­dend growth rate in ex­cess of 20%, plac­ing it among the lead­ers of its peer group. If the Of­fer is ac­cepted, COS’ share­hold­ers would ex­pe­ri­ence a 45 per cent div­i­dend up­lift.

• In­vest­ment in an in­te­grated energy com­pany with sig­nif­i­cant liq­uid­ity and ac­cess to cap­i­tal. Sun­cor’s in­te­grated busi­ness model is de­signed to gen­er­ate con­sis­tent cash flow which has en­abled Sun­cor to fund its cap­i­tal pro­gram, div­i­dend com­mit­ments and planned growth projects, even in sus­tained pe­ri­ods of lower com­mod­ity prices. COS share­hold­ers would be po­si­tioned to ben­e­fit from Sun­cor’s in­te­grated model and on­go­ing pro­duc­tion growth, and con­tinue to par­tic­i­pate in any oil price re­cov­ery.

• Es­tab­lished and ex­pe­ri­enced man­age­ment team has de­liv­ered strong fi­nan­cial and op­er­a­tional re­sults. Sun­cor is led by its pres­i­dent and chief ex­ec­u­tive of­fi­cer, Steve Wil­liams, and his ex­ec­u­tive team, who to­gether bring deep oil sands and energy ex­pe­ri­ence. In ad­di­tion, Sun­cor’s board of di­rec­tors is com­posed of highly ca­pa­ble, ex­pe­ri­enced, di­verse and in­de­pen­dent di­rec­tors. Sun­cor main­tains an in­tense fo­cus on op­er­a­tional ex­cel­lence, con­tin­u­ous im­prove­ment and cap­i­tal dis­ci­pline, all of which have de­liv­ered strong re­sults for share­hold­ers. As a re­sult, Sun­cor is well po­si­tioned to cap­ture the value po­ten­tial in COS’ as­sets.

• Op­por­tu­nity to de­fer tax­a­tion. Cana­dian res­i­dent share­hold­ers who hold their shares as cap­i­tal prop­erty will gen­er­ally be en­ti­tled to an au­to­matic rollover to de­fer Cana­dian tax­a­tion on the dis­po­si­tion of their shares. Such Cana­dian share­hold­ers may choose to re­port a cap­i­tal gain or loss on the ex­change of their shares in which case the rollover would not ap­ply to any of their shares. Sun­cor in­tends for the Of­fer to be treated as a re­or­ga­ni­za­tion for U.S. fed­eral in­come tax pur­poses such that no gain or loss will gen­er­ally be rec­og­nized by U.S. hold­ers on the dis­po­si­tion of their shares.

About the Of­fer: The Of­fer will be open for ac­cep­tance un­til 5:00 p.m. (Cal­gary time) on De­cem­ber 4, 2015, un­less ex­tended or with­drawn. Sun­cor has struc­tured the Of­fer to meet the re­quire­ments of a “Per­mit­ted Bid” un­der COS’ ex­ist­ing share­holder rights plan.

The Of­fer is sub­ject to cer­tain cus­tom­ary con­di­tions in­clud­ing, among other items, that more than 66 2/3 per cent of the out­stand­ing COS shares (cal­cu­lated on a fully-di­luted ba­sis) shall have been validly ten­dered un­der the Of­fer and not with­drawn and cer­tain reg­u­la­tory ap­provals (as out­lined in the of­fer to pur­chase and take-over bid cir­cu­lar and re­lated of­fer doc­u­ments (the “Of­fer Doc­u­ments”) that will be filed on SEDAR and with the SEC, as de­fined herein, later to­day and through­out the cur­rency of the Of­fer) shall have been ob­tained. Sub­ject to ap­pli­ca­ble law, Sun­cor re­serves the right to with­draw or ex­tend the Of­fer and to not take up and pay for any COS shares de­posited un­der the Of­fer un­less each of the con­di­tions of the Of­fer is sat­is­fied or waived by Sun­cor at the ex­piry time of the Of­fer. COS share­hold­ers are strongly en­cour­aged to read the Of­fer Doc­u­ments care­fully and in their en­tirety since they con­tain ad­di­tional im­por­tant in­for­ma­tion re­gard­ing Sun­cor and the terms and con­di­tions of the Of­fer.

Copies of the Of­fer Doc­u­ments re­ferred to above may also be ob­tained free of charge upon re­quest made to the cor­po­rate sec­re­tary of Sun­cor at P.O. Box 2844, 150 - 6 Av­enue S.W., Cal­gary, Al­berta Canada T2P 3E3.

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