Canadian Oil Sands (TSE:COS) directors have recommended shareholders reject the hostile takeover bid from Suncor (NYSE:SU, TSE:SU), claiming the offer is too low.
In a statement the takeover approach was described as “opportunistic and exploitive” by COS.
The Suncor offer, pitched at $4.5bn, substantially undervalues the company according to the board of COS which has now unanimously rejected the offer.
“The bid fails to recognize that COS is strongly positioned to withstand low oil prices and emerge with even greater value when oil prices recover,” the company said.
Moreover, COS identified fifteen reasons – which it describes as ‘compelling’ – for shareholders to reject the takeover offer.
COS said its recommendation was based on a full review of the offer. These reasons include the view that Suncor has undervalued what COS says are “unique strategic assets” and says the offer doesn’t account for the company’s ‘superior leverage to oil prices’.