CALGARY - A prominent Canadian businessman has taken out full-page newspaper ads to declare his opposition to a hostile takeover of Canadian Oil Sands, but the CEO of Suncor Energy says he believes Seymour Schulich is in the minority.
In the ads, addressed to fellow COS shareholders, Schulich said he believes Suncor is willing to pay more than it has offered: a quarter of a Suncor share (
TSX:SU,
Forum) for each COS share (
TSX:COS,
Forum). That amounts to a total of $4.3 billion, based on Suncor's most recent closing share price.
“The fact is Suncor needs Canadian Oil Sands more than we need them,” wrote Schulich, who in his open letter described a long career working and investing in the oil and gas industry.
“I'm not selling at this price and you shouldn't either.”
The ads appear in the Tuesday business sections of The Globe and Mail and the National Post newspapers as the two Calgary-based oilsands companies woo shareholders ahead of a Friday deadline set by Suncor. Suncor also took out ads addressing COS shareholders with the headline: “Hope is not a strategy.”
On a conference call to field questions about the bid, Suncor CEO Steve Williams said he has “tremendous respect” for Schulich and praised his “wonderful track record” as an investor.
Schulich told the Financial Post last month that shareholders who together own 28 per cent of COS stock would not tender to the bid. Schulich himself owns five per cent of the company, according to the report.
Williams said Schulich's remark doesn't reflect what he's heard from shareholders.
“From all of the information we've got, he is very much in the minority and the best indications I have - and it's not an exact science - is there are not 28 per cent of people in alignment against this offer. In fact, if you read Schulich's letter, one of the things I read into it, he wasn't actually against it, he was negotiating price,” said Williams, noting that not all COS shareholders are willing to hold out for a recovery in crude prices.
“I respect his view, but I don't think it's very reflective of the broader messages we are receiving.”
Suncor said Monday that it will move on to other opportunities if, by Friday evening, it does not receive “substantial support” for its offer. Williams said Monday in an interview that the probability of a sweetened offer was “very low.”
COS issued what it called a “declaration of independence,” reiterating its view that shareholders are better off in the long run if the company continues on in its current form, despite continued weakness in crude prices.
Both companies are partners in the Syncrude oilsands mine north of Fort McMurray, Alta., - COS with 37 per cent and Suncor with 12 per cent.
COS's main asset is its Syncrude stake, whereas Suncor is one of Canada's biggest energy names, with vast operations in the oilsands and a host of other refining and offshore holdings.