Petroleum storage tanks at the Suncor tar sands operations near Fort McMurray, Alberta, in this September 17, 2014, file photo.TODD KOROL/Reuters
DEAL OF THE DAY
Rivals drop the rancour as Suncor, COS get $4.2-billion deal
Suncor Energy Inc. has sweetened its all-stock takeover bid for Canadian Oil Sands Ltd., defusing a bitter feud between the companies and moving closer to securing a bigger stake in the Syncrude oil sands project.
Suncor said on Monday that it raised its offer to 0.28 of one of its shares for each Canadian Oil Sands share, while lowering the threshold of support needed from the target's shareholders to 51 per cent. It had previously offered an exchange ratio of 0.25 and required two-thirds support from Canadian Oil Sands shareholders.
The amended offer works out to roughly $4.2-billion or $8.74 a share, a 17-per-cent premium to Canadian Oil Sands' closing share price on Friday.
It is supported by Canadian Oil Sands' board and management, as well as Seymour Schulich, an outspoken critic of the previous bid. He owns about 5 per cent of COS and said he intends to tender to the revised offer, according to a joint statement. Story
How much did Canadian Oil Sands really win in Suncor battle?
Canadian Oil Sands Ltd. has portrayed its newly friendly takeover agreement with Suncor Energy Inc. as a victory for shareholders.
Given how far the overall market has fallen in the months since Suncor made its initial bid, and how rancorous the battle was, cheering among investors may be muted.
In the deal announced Monday, COS shareholders will get 0.28 of a Suncor share for each of their shares, which is a 12-per-cent bump from Suncor's previous 0.25-for-one ratio offered in early October.
The agreed bid was only slightly higher than Suncor's previous offer, and still below an informal bid of 0.33 of a Suncor share that COS dismissed in April.
The energy world is quite different now. West Texas intermediate crude sold for more than $45 (U.S.) a barrel when Suncor launched its bid. It has since slumped to less than $29, and many analysts expect further weakness for much of this year. Story
STREET MOVES
AltaCorp energy research analyst moves on
AltaCorp Capital Inc. is losing one of its original energy research analysts as the oil shock batters the industry.
Dana Benner, who had been managing director of research and energy services analyst, has resigned and is headed for a buy-side position, according to sources. Story
INSIGHT
Scotiabank pivots toward Mexico
Investors have been associating Bank of Nova Scotia with troubled emerging markets and a weak domestic economy, but the Canadian lender is countering with a different association: Mexico.
During the first part of its international banking investor day, held in Mexico City, Scotiabank highlighted the country's large economy, close proximity to the United States and relatively under-banked population as a reason to feel upbeat about its prospects – and, by extension, Scotiabank's.
"In terms of pure potential, Mexico represents the biggest single opportunity for us," said Dieter Jentsch, group head of international banking, noting in particular the goal of expanding its reach into credit cards. Story
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