Financial adviser says parties other than Suncor kicking COS tires

CALGARY – Suncor Energy may have some competition in its hostile takeover pursuit of Canadian Oil Sands.

An affidavit filed to the Alberta Securities Commission by a COS financial adviser says that, as of last week, more than 25 other parties were kicking the tires.

Jamie Anderson, with RBC Capital Markets, says four highly credible parties have signed confidentiality agreements.

Suncor is asking the securities regulator to strike down a measure COS put in place to defend itself against its all-stock $4.5-billion bid.

COS enacted a new shareholder rights plan — also known as a poison pill — shortly after Suncor took its offer directly to shareholders in October. It’s a means for COS to buy time to weigh alternatives to Suncor’s offer, which the target company has derided as too low, opportunistic and exploitive.

Suncor’s offer expires on Dec. 4. Bids permitted under the COS shareholder rights plan must be open for 120 days. A hearing into Suncor’s poison-pill challenge is set for Thursday.

“I firmly believe that with more time to run our process, there is a good prospect for one or more counterparties to make a proposal,” Anderson said in the affidavit.

“In my opinion, a 60-day period to canvas the range of parties interested in the COS opportunity, to permit them to undergo due diligence and to negotiate an alternative transaction, is simply insufficient in these circumstances. I firmly believe 120 days is a more realistic time period.”

Suncor has warned COS shareholders that failing to accept its offer is a risky proposition, given the likelihood of a prolonged downturn in oil prices. Suncor has described its offer as “full and fair” and has signalled it won’t be sweetening the deal.

Both companies are partners in the Syncrude oilsands project. COS has a 37 per cent stake, which is its main asset. Suncor has a 12 per cent share of Syncrude and has vast oilsands operations in northeastern Alberta.

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