| Suncor Energy Announces C$4.3B Bid for Canadian Oil Sands | |
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Apart from being merged with the leading Canadian integrated energy company, the offer would give Canadian Oil Sands shareholders an opportunity to benefit from Suncor’s growing dividends. Acceptance of the offer would mean a 45% dividend growth for Canadian Oil Sands shareholders. What’s in it for Suncor Energy? The deal would enable Suncor to further expand in the region. Acquiring Canadian Oil Sands would substantially increase Suncor’s holding in the Syncrude project. The deal would increase the firm’s ownership in the project to about 49% from the current stake of just 12%. The Syncrude project, a joint venture between seven companies, is the leading producer of synthetic crude oil from the oil sands. Notably, Suncor had approached the company in March this year but was turned down. Per media reports, Canadian Oil Sands is likely to reject the offer again. Suncor had then offered 0.32 shares for each Canadian Oil Sands share, much higher than the current bid. More Bidders on the Way? The weak crude pricing environment has affected Canadian Oil Sands’ shares, making it an attractive takeover target. The market is ripe with speculations that Suncor’s unsolicited offer could start a bidding war. Imperial Oil Ltd. IMO, which owns 25% in the Syncrude joint venture, could be a potential bidder. Other parties in the Syncrude joint venture are China’s Sinopec and CNOOC Ltd. with about 9% and 7% stakes, respectively. Mocal Energy and Murphy Oil MUR hold 5% each. However, Imperial Oil remains the most logical buyer. A major Canadian Oil Sands shareholder, who owns a 5% stake in the company, does not find the bid to be an attractive one. Zacks Rank Currently, both Suncor Energy and Canadian Oil Sands carry a Zacks Rank #3 (Hold). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MURPHY OIL (MUR): Free Stock Analysis Report SUNCOR ENERGY (SU): Free Stock Analysis Report IMPERIAL OIL LT (IMO): Free Stock Analysis Report CDN OIL SANDS (COSWF): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Suncor Energy is a and oil producing company based in Canada. Suncor Energy holds various exploration projects in Canada. Its main exploration property is SUNCOR OPERATIONS & BASE MINE in Canada. |