RE:SU leaving itself open to a takeoverObscure1 wrote: The market has slammed the share price of many of the oil producers down by 20% or more, so the pain SU shareholders are experiencing is not unique.
What is somewhat unique is the SH management is embracing the pain and using it to its advantage.
It doesn't take a rocket scientist to figure out that SU is undervalued at this time. If we can figure it out, so can funds whose primary function is to circle when there is blood in the water.
Unlike IPL which bit off more than they could chew with its Heartland project and left itself vulnerable, SU made the difficult choices which put the company on solid ground - except for the South Slope of course :)
On the other hand there is a similarity between IPL and SU in that the management of both companies has exhibited an arrogant attitudes towards shareholders which left both companies severerly undervalued.
Brookfield jumped into IPL when the share price was down and picked up 20% of the company. Now, Brookfied is in a postion to swallow up IPL.
It would take 300 million shares of buying to pick up 20% of SU. With the street walking away from "everything oil" and SU taking a "we don't care" attitude, it wouldn't be too difficult for a fund to pick up 10 million shares or more per week. By the end of the year, a fund could own 20% of SU.
The cost to buy 300 million shares at C$25 per share would be about US$6 billion. There are lots of funds that could write that cheque. Unlike IPL that has a very loyal shareholder base, SU is burning bridges and who knows which way shareholders would vote in a takeover bid.
Interesting post
Personally I don't think that SU is a takeover candidate.
That said...your comparison to IPL is noteworthy. In the case of IPL...the primary ownership was retail whereas with SU it is institutional and so with that factor SU woiuld be an easier takeover target.
In your post you mentioned Heartland. I was a long time holder of IPL but sold before the issues WRT Heartland became evident. Not because I was prescient...but rather because the numbers from a couple of IPL Q reports told me that the company was in trouble. Despite the issues WRT to Heartland I still considered it a jewel even though I had sold and kept it on my watchlist.
When we saw the takeover try by Brookfield and the higher offer from PPL, I took a look at it and determined that both offers undervalued Heartland and hence IPL. Since the PPL offer was better than Brookfield a few weeks ago, I looked at "the other side of the coin" and determined that people would see that if PPl was successful then it would steal IPL and I bought, as a short term play, PPL stock and sold a few days later for a 7% gain.
Getting back to SU, since IMO right now, they are a "one trick pony" and it would take over 30 billion to buy them out and the negative attitude towards "dirty oil" I don't see anyone stepping up the the plate to buy them.
All that said, in reading the posts here by many, with my experience, I think that many people here don't realize what a great buying opportunity the company is presenting to shareholders. In that vein, I bought a bit more today, although in full disclosure, I am still underweighted. If it goes down more i will buy more.