Amended offer increases exchange ratio to 0.28 of a Suncor
share for each COS share
Amended offer supported by COS Board and Seymour Schulich
Amended offer expected to expire at 4:00 p.m. (MT) on February
5, 2016
Shareholders are urged to tender their shares
(All dollar amounts referenced are in Canadian dollars)
CALGARY, Jan. 18, 2016 /CNW/ - Suncor Energy Inc. (TSX:
SU; NYSE: SU) and Canadian Oil Sands Limited (TSX: COS) are pleased
to announce that they have reached an agreement to support the
offer by Suncor to purchase all of the shares of COS.
Under the terms of the support agreement (the "Agreement")
Suncor has agreed to amend its offer (the "Amended Offer") to
provide for an increase in the original offer to COS shareholders
to 0.28 of a Suncor share for each COS share. The Amended Offer,
with a total aggregate transaction value of approximately
$6.6 billion including COS' estimated
debt of $2.4 billion, has the support
of the Boards of Directors of both companies.
The COS Board has received an opinion from its financial
advisor, RBC Capital Markets, that, as of January 17, 2016, the consideration under the
Amended Offer is fair, from a financial point of view, to COS
shareholders. The COS Board has determined that the Amended Offer
is in the best interests of COS and recommends that shareholders
tender to the Amended Offer.
"We are pleased to have the support of the COS Board of
Directors and shareholders, including Seymour Schulich, and have been advised of their
intent to tender their shares" said Steve
Williams, Suncor's president and chief executive officer.
"We believe this transaction delivers excellent value to COS
shareholders while maintaining Suncor's commitment to capital
discipline, providing both companies' shareholders with near and
long-term value. Together, we're bringing this full, fair and final
offer to COS shareholders and we encourage everyone to tender their
shares."
"Since Suncor made its initial offer, our Board has remained
steadfast in our commitment to maximize value for all shareholders.
This agreement fulfills that commitment, providing our shareholders
with a higher exchange ratio for their shares despite a 37 percent
decline in spot oil prices," said Don
Lowry, Chairman of Canadian Oil Sands. "Our
shareholders clearly signaled they expected more for their COS
shares, and the Board has worked to secure that under very
challenging circumstances. Given the current market for
energy equities, we recommend shareholders tender their shares to
Suncor's improved offer."
"I am pleased that working in conjunction with the COS Board,
together we have been able to improve the terms of the offer for
our shares. I will be tendering my shares, and consistent with the
COS Board's recommendation, I encourage my fellow shareholders to
tender their shares" said Seymour
Schulich, a major holder of COS shares.
A notice of variation and extension for the Amended Offer is
expected to be mailed to registered security holders of COS by the
end of this week and will be filed on COS' SEDAR profile. The
Amended Offer will include an extension of the expiry time which is
currently anticipated to be extended to 4:00
p.m. (MT) on February 5,
2016. COS shareholders are urged to carefully review this
document in its entirety.
The Amended Offer is subject to certain conditions, including
the acquisition by Suncor of at least 51% of the outstanding Shares
(calculated on a fully-diluted basis) being validly tendered under
the Amended Offer and not withdrawn. This minimum tender
condition has been lowered from 66⅔%. Suncor has agreed that
if it takes up any Shares, that it will pursue a subsequent
acquisition transaction to acquire any shares not tendered to the
Amended Offer. As a result of lowering the minimum tender condition
to 51%, there have been changes to the expected U.S. federal income
tax consequences to accepting the offer and Suncor now expects that
the receipt of Suncor common shares in exchange for COS common
shares pursuant to the Amended Offer will be a taxable transaction
for U.S. federal income tax purposes. COS shareholders are urged to
carefully review the amended U.S. federal income tax disclosure to
be provided in the notice of variation and extension. The
Amended Offer will continue to allow a tax-deferred rollover for
Canadian shareholders of COS.
The Agreement provides that COS' Board will issue a notice of
change to its directors' circular that will contain its favourable
recommendation to COS shareholders, together with the fairness
opinion provided by RBC Capital Markets. COS expects to issue and
mail the notice of change with Suncor's notice of variation and
extension in connection with the Amended Offer. The Agreement
contains, among other things, provisions for the suspension of
dividends in the first quarter of 2016 by COS, for non-solicitation
of competing offers, provided that COS has the right to consider
superior proposals from other parties, subject to a right on the
part of Suncor to match any such proposal and for a $130 million break fee payable by COS to Suncor
in certain circumstances if the offer is not completed.
Shareholders who tender by the expiry date, assuming the Amended
Offer conditions are satisfied on that date, will be entitled to
receive Suncor's first quarter 2016 dividend anticipated to be paid
in late March, 2016.
JP Morgan and CIBC World Markets are financial advisors to
Suncor. Blake, Cassels & Graydon LLP and Sullivan &
Cromwell LLP are Suncor's legal advisors. RBC Capital Markets
is COS' financial advisor. COS' legal advisors are
Osler, Hoskin & Harcourt LLP
and Norton Rose Fulbright Canada LLP (advisor to the COS
Board). COS' strategic shareholder services and
communications advisor is Kingsdale Shareholder Services.
About Suncor's Offer to COS shareholders
Full details of the Amended Offer and the related documents
including, once filed, the notice of variation and extension and
the notice of change, are, or will be, available under the COS
profile at sedar.com and through Suncor's website at
suncorofferforcanadianoilsands.com.
To accept this Amended Offer, COS shareholders must tender
their shares. Please contact D.F.
King, who has been retained as Suncor's information agent
for instructions at:
Toll Free in North America:
1-866-521-4427
Banks, Brokers and Collect Calls: 1-201-806-7301
Toll Free Facsimile: 1-888-509-5907
Email: inquiries@dfking.com
NOTICE TO U.S.
HOLDERS
The Amended Offer (referred to as the "Offer" in this advisory)
is being made for the securities of a Canadian issuer by a Canadian
issuer that is permitted, under a multijurisdictional disclosure
system adopted by the United
States, to prepare the Offer documents in accordance with
the disclosure requirements of Canada. Shareholders in the United States should be aware that such
requirements are different from those of the United States. The financial statements
included or incorporated by reference in the Offer documents have
been prepared in accordance with International Financial Reporting
Standards, and are subject to Canadian auditing and auditor
independence standards, and thus may not be comparable to financial
statements of U.S. companies.
Shareholders in the United
States should be aware that the disposition of their shares
in COS ("Shares") and the acquisition of Suncor common shares by
them as described in the Offer documents may have tax consequences
both in the United States and in
Canada. Such consequences for
shareholders who are resident in, or citizens of, the United States may not be described fully
in the Offer documents.
The enforcement by shareholders of civil liabilities under U.S.
federal securities laws may be affected adversely by the fact that
each of Suncor and COS are incorporated under the laws of
Canada, that some or all of their
respective officers and directors may be residents of a foreign
country, that some or all of the experts named in the Offer
documents may be residents of a foreign country and that all or a
substantial portion of the assets of Suncor and COS and said
persons may be located outside the United
States.
THE SUNCOR COMMON SHARES OFFERED AS CONSIDERATION IN THE OFFER
DOCUMENTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION ("SEC") OR ANY U.S. STATE SECURITIES COMMISSION NOR HAS
THE SEC OR ANY U.S. STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE OFFER AND CIRCULAR. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
Shareholders should be aware that, during the period of the
Offer, Suncor or its affiliates, directly or indirectly, may bid
for or make purchases of Suncor common shares or Shares, or certain
related securities, as permitted by applicable law or regulations
of the United States, Canada or its provinces or territories.
On October 5, 2015 Suncor filed a
registration statement on Form F-80, as amended from time to time,
which includes the documents related to the Offer, with the SEC in
respect of the Offer. This news release is not a substitute for
such registration statement or any other documents that Suncor has
filed or may file with the SEC or send to shareholders in
connection with the Offer. INVESTORS AND SHAREHOLDERS ARE URGED TO
READ THE REGISTRATION STATEMENT ON FORM F-80 AND ALL OTHER RELEVANT
DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE
OFFER AS THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION. You will be able to obtain a free
copy of the registration statement on Form F-80, as well as other
filings containing information about Suncor, at the SEC's website
(www.sec.gov).
Forward-Looking Statements
This news release contains certain "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" within the meaning of applicable Canadian securities
legislation (collectively, "forward-looking statements"), including
statements about: the timing of mailing of the notice of change and
variation in respect of the Amended Offer, the expected new expiry
time of the offer and the value of the offer for COS shareholders,
the short and long term benefits of owning shares in Suncor, all of
which are based on Suncor's and COS', as applicable, current
expectations, estimates, projections and assumptions.
Although each of Suncor and COS, as applicable, believes that the
expectations represented by such forward-looking statements are
reasonable, there can be no assurance that such expectations will
prove to be correct, so readers are cautioned not to place undue
reliance on them. Forward-looking statements are not
guarantees of future events occurring or of future performance and
involve a number of risks and uncertainties, some that are similar
to other oil and gas companies and some that are unique to Suncor
and/or COS. Users of this information are cautioned that
actual events and results may differ materially as a result of,
among other things, assumptions regarding expected timing,
synergies and reduced operating expenditures; volatility of and
assumptions regarding oil and gas prices; assumptions regarding
timing of commissioning and start-up of capital projects;
fluctuations in currency and interest rates; product supply and
demand; market competition; risks inherent in marketing operations
(including credit risks); imprecision of production and reserves
estimates and estimates of recoverable quantities of oil, natural
gas and liquids; the ability to access external sources of debt and
equity capital; the timing and the costs of well and pipeline
construction; assumptions regarding the timely receipt of
regulatory and other approvals; the ability to secure adequate
product transportation; changes in royalty, tax, environmental and
other laws or regulations or the interpretations of such laws or
regulations; applicable political and economic conditions; the risk
of war, hostilities, civil insurrection, political instability and
terrorist threats; assumptions regarding OPEC production quotas;
and risks associated with existing and potential future lawsuits
and regulatory actions. Readers are cautioned that the
foregoing list of risk factors is not exhaustive. Additional
information on these and other factors that could affect events and
results are included in reports and other documents, including
those related to the Offer, by Suncor and COS with the Canadian and
United States securities
regulatory authorities at sedar.com and at
sec.gov.
Except as required by applicable securities laws, each of
Suncor and COS disclaims any intention or obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
About Suncor
Suncor Energy is Canada's leading
integrated energy company. Suncor's operations include oil sands
development and upgrading, onshore and offshore oil and gas
production, petroleum refining, and product marketing under the
Petro-Canada brand. A member of Dow Jones Sustainability indexes,
FTSE4Good and CDP, Suncor is working to responsibly develop
petroleum resources while also growing a renewable energy
portfolio. Suncor is listed on the UN Global Compact 100 stock
index and the Corporate Knights' Global 100. Suncor's common
shares (symbol: SU) are listed on the Toronto and New
York stock exchanges.
For more information about Suncor, visit our web site at
suncor.com, follow us on Twitter @SuncorEnergy, or come
and See what Yes can do.
About COS
COS holds a 36.74 percent interest in the Syncrude project,
the largest producer of light, sweet synthetic oil from
Canada's oil sands. As a pure play
in Syncrude, COS provides investors with long-life, light crude oil
exposure and since 2001 has paid dividends totaling $7.9 billion.
SOURCE Canadian Oil Sands Limited