3 Min Read
* Suncor bid needs two-thirds shareholder support to succeed
* With no rival bids, Suncor likely to succeed -lawyer
* Canadian Oil Sands reiterates view that bid undervalues it
* Many Alberta oil sands producers struggling with weak prices (Clarifies and elaborates on background to the bid and requirements for success in paragraphs 2-3; adds response from Canadian Oil Sands in paragraph 4)
By John Tilak and Nia Williams
TORONTO/CALGARY, Jan 8 (Reuters) - Suncor Energy Inc , Canada's largest oil producer, said on Friday it had extended its hostile bid for Canadian Oil Sands Ltd until Jan. 27.
Suncor needs to secure at least two-thirds support from shareholders to succeed in the bid, which comes against a backdrop of tumbling global crude oil prices that slid to a 12-year low this week.
Many producers in the oil sands region of northern Alberta are struggling to cover cash costs.
In a statement on Friday, Canadian Oil Sands said it wanted its shareholders to take no action on Suncor's bid, reiterating its view that it is undervalued by the bid.
Suncor bid for Canadian Oil Sands in October and later extended the offer until Jan. 8, promising shareholders improved operating efficiencies and a dividend boost.
In response, Canadian Oil Sands has mounted a spirited defense of its independence, adopting a new shareholder rights plan that would act as a poison pill and urging investors to reject what it called a substantially undervalued Suncor bid.
No alternate bidder surfaced for Canadian Oil Sands during this time.
"When no competitor emerges, which is the case here, bidders have won two-thirds of the time," said Fasken Martineau partner Bradley Freelan, referring to a study on hostile bids that he co-authored.
He added that Suncor was in a strong position in the fight.
Syncrude in northern Alberta is Canada's largest single source of crude oil and Canadian Oil Sands' only producing asset, in which it has a 36.7 percent stake.
The upgrading and mining project has capacity to produce up to 350,000 barrels per day but has been dogged for years by operating issues and missed production targets.
Earlier this week, Suncor Chief Executive Steve Williams had said he would walk away from the deal if not enough shares are tendered by Friday's deadline. (Reporting by John Tilak, Nia Williams and Euan Rocha; Editing by Sandra Maler and Edmund Klamann)