TORONTO: Canadian Oil Sands Ltd. is likely to reject a $4.3-billion takeover bid from Suncor Energy Inc. in order to extract a higher price or provoke a competing offer, analysts and investment bankers say.
Calgary-based Suncor made two friendly offers earlier this year before turning hostile this week in its all-stock offer to acquire Canadian Oil Sands’ 37-per-cent stake in the Syncrude Canada Ltd. oil sands project. Syncrude is Canadian Oil Sands’ only asset, and would provide Suncor with additional production at a hefty discount to the cost of developing a new oil project. Suncor currently owns 12 per cent of Syncrude.
Shares of Canadian Oil Sands slipped 3 per cent to close at $9.28 Tuesday on the Toronto Stock Exchange. On Monday, the stock surged 55 per cent to close well above the implied value of Suncor’s offer, suggesting investors thought a rival bid would emerge.
Canadian Oil Sands did not respond to a request for comment Tuesday. The company issued a statement on Monday that urged shareholders to sit tight while it reviews the bid.
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