Suncor bid is an insult to COS shareholders
The poison pill is the best strategy to protect COS shareholders from Suncor's guerrilla tactics. COS was not up for sale, especially in this temporarily-low price environment, created by US fraccers oversupplying the market.
For those who feel the deal is fair, they are able to sell their shares in the open market. For the rest of us who have some understanding of what COS is worth today, and in years to come, the shareholder rights plan will give the company some time to speak with other bidders and keep Suncor off their backs.
Production max of 120k barrels per day is worth $12B. Subtract $2B debt and you should be paid $10B for the company. $10B / 485mm shares gives you a $20.50 share price. That price values their billions of barrels of reserves at $0 and their upgrader at $0.
Suncor is attempting to steal this company.
COS management and BOD are now doing what they are paid to do, protect the interests of the shareholders and the life of the company.
Do not compare SU to COS because they are two different businesses. COS is a $4B pure-play oil sands miner while Suncor is a $50B diversified, out to date-rape COS shareholders who lack basic understanding of the long-term merits of the business.
When oil goes back to $75, COS will trade close to $20, while SU may trade in the mid $40's. COS has a higher beta because they are a fixed-cost producer.
You don't have to believe me. Search Seymour Schulich + Canadian Oil Sands for a review of his thoughts on Suncor's slimy stunt. Schulich has 25 million shares and feels the deal is not fair unless it's $20+
You want to disagree with a fellow who's net worth is close to $2B, then feel free but you're wasting your time.