DBRS Comments on Canadian Oil Sands Limited Following Offer from Suncor Energy Inc.

DBRS Limited (DBRS) today notes that Suncor Energy Inc. (Suncor; rated A (low)) has formally commenced an unsolicited offer to acquire all of the outstanding shares of Canadian Oil Sands Limited (COS; rated BBB (low by DBRS)) in an all equity transaction for approximately $6.6 billion, including the assumption of $2.3 billion in net debt. COS has a 36.74% equity interest in Syncrude Canada Ltd.

Currently, it is uncertain (1) whether the takeover bid will be accepted or a competing bid may arise which could result in a bidding war, and (2) as to how Suncor plans to ultimately restructure COS’s debt. DBRS will further review Suncor or a potential competing bidder’s financing plan, and take an appropriate rating action if needed in the future.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Companies in the Oil and Gas Industry, which can be found on our website under Methodologies.